Liquid crystals are a typical functional soft matter, possessing both the fluidity of liquids and the ordering of crystals. Liquid crystals show rich self-assembled microstructures and unique physical and chemical properties. Besides, liquid crystal display, applications of liquid crystals in areas such as optics and functional materials have achieved a large progress. Liquid crystal droplets, which could serve as basic functional elements, own the characteristics of rich features, easy orientation and processing integration, have received extensive attention. The functions and properties of cholesteric liquid crystal droplets could be tuned by their microstructures and compositions, which show a great potential for applications. This review systematically summarizes the molecular arrangements, physicochemical properties and frontier applications of spherical, oblate and complex cholesteric droplets. The application prospects of liquid crystal droplets as functional elements in smart functional materials, photonic devices and soft robotics are also discussed.