A key method for institutional analysis is the Institutional Grammar Tool (IGT), introduced by Crawford and Ostrom in 1995, which facilitates the breakdown of legal documents into components, further named institutional statements. This systematic review examines the IGT's evolution and applicability in scientific literature to understand institutional dynamics and policymaking. Using bibliometric analysis and systematic literature review, we analysed the content of 432 articles spanning 1995 to 2023, focusing on IGT usage and outputs, out of which 62 articles were relevant for the present analysis. The analysis reveals a significant and promising trend in IGT's adoption, with a notable surge in publications since 2010. North American authors lead in IGT usage, particularly in legislative content analysis. Case studies were focused on environmental and social-ecological domains. While IGT remains a primary analysis method in most studies, complementary methods such as interviews and qualitative comparative analysis supplement its application. The advantages of IGT include enhanced institutional understanding and rigorous policy analysis, while limitations such as interpretative challenges and time constraints persist. Thematic clusters in keyword networks show how research interests are changing over time. For example, regulatory governance was studied in the past, whereas lately normative frameworks and computational modelling in conservation governance have been employed. This review underlines the increasing relevance of the IGT in institutional analysis and policy studies. By synthesizing trends and methodologies, it provides valuable insights into IGT's evolution and challenges, paving the way for future research endeavours aimed at refining its applicability and advancing governance theory and practice.