Inorganic lanthanide oxides are promising host lattices owing to their stable chemical and physical stability, large Stoke shifts, absence of photobleaching, and low phonon energy. Among the various lanthanide oxides, Gd2O3 has fascinated the modern era with its single-phase multimodal nature. Due to the presence of seven unpaired electrons in the f-orbitals of Gd3+ ions, it shows superparamagnetic behavior than the other oxides. It exhibits sharp, narrow, and intense spectra when doped with different rare-earth (Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, and Yb) and non-rare-earth (Bi, Mn) elements. The dual luminescence and paramagnetic behavior make it a bi-functional material due to which it finds vast applications in optoelectronic devices, field emission displays, bio-sensors, bio-probes, and MRI contrast agents. The present article encompasses mainly structural analysis, synthesis, and spectroscopic investigations of doped and undoped Gd2O3 phosphors for various applications. This review article is fundamentally distributed into four parts. In the first part, different synthesis routes of Gd2O3 are reviewed, and their resulting outcomes are compared. In the second part, different structures of Gd2O3 with site occupancy of metal ions are discussed. Then, the different spectroscopic and optical properties of doped and undoped Gd2O3 are illustrated. The consequences of the different factors on the luminescent properties and energy transfer mechanisms in Gd2O3 phosphors are also discussed. The last part of the review article is devoted to the applications of Gd2O3 phosphors in various fields.