Due to the rapid increase in the global demand for renewable energy and uneven, seasonal distribution of bulky biomass resources, developing decentralized and mobile biomass thermochemical conversion systems are critical, particularly to accommodate the energy needs of rural residents in developing countries and remote communities. This paper establishes the fundamental concepts of decentralized and mobile thermochemical biomass conversion systems and addresses the necessity and advantages of such systems. This article comprehensively examines the potential of various biomass and non-biomass waste streams for co-processing in such systems and summarizes the latest progress in pretreatment technologies, conversion pathways, product separation and purification, and applications. Moreover, this paper compares the designs and specifications, operation status, drawbacks, and benefits of existing systems from household to industrial-scale. It also summarizes the latest studies on the socioeconomic and environmental impacts of such systems. The key challenges in the future research and development of such systems are discussed, including systems integration and simplifications, interaction mechanism of mixed waste during co-processing, development of cost-effective catalysts, and investigation of biochar applications. Also, our recommendation is to re-visit the direct-combustion technology under a modern technological and environmental perspective. Moreover, it is necessary to promote education and training for the development of dedicated skills to support the operation and maintenance of conversion systems at secondary or higher levels.