Wound healing is a complex process depending on several interrelated elements. Wound healing and management have to be based on an awareness of normal tissue regeneration and the elements affecting this process. The perfect wound dressing should be reasonably priced and cause the person the least possible pain. Because of its cytocompatibility, biodegradability, non-carcinogenic, and antibacterial qualities, chitosan is among the most often investigated biopolymers for use in wound healing. Furthermore, chitosan and its derivatives attract a lot of attention because of their easy processability in wound dressings and their capacity to hasten the healing process. These qualities make chitosan-based materials rather flexible and appealing for use as wound dressings. Moreover, secondary metabolic byproducts could be antifungal and antibacterial agents, thus accelerating the healing process. A thorough literature review on chitosan-based dressing for wounds is still lacking. We have compiled the features of skin physiology, chitosan, and the phases of wound healing. We have discussed the importance of dressing materials based on chitosan, including the delivery mechanism. We have finally addressed the relevance of chitosan, its future prospects, and its constraints, as well as other ideas for development in wound healing.