Liquefied natural gas (LNG) is widely regarded as the midterm solution toward zero-carbon transportation at sea. However, further applications of gas engines are challenging due to their weak dynamic load performance. Therefore, the comprehension of and improvements in the dynamic performance of gas-engine-based power systems are necessary and urgent. A detailed review of research on mechanisms, modeling, and optimization is indispensable to summarize current studies and solutions. Developments in engine air-path systems and power system load control have been summarized and compared. Mechanism studies and modeling methods for engine dynamic performance were investigated and concluded considering the trade-off between precision and simulation cost. Beyond existing studies, this review provides insights into the challenges and potential pathways for future applications in decarbonization and energy diversification. For further utilization of clean fuels, like ammonia and hydrogen, the need for advanced air–fuel ratio control becomes apparent. These measures should be grounded in a deep understanding of current gas engines and the combustion characteristics of new fuels. Additionally, the inherent low inertia feature of electric power systems, and consequently the weak dynamic performance when adopting renewable energies, must be considered and studied to ensure system reliability and safety during transient conditions.