The integration of liquid crystals and microfluidics has catalyzed the emergence of new research and application domains. This combination enhances the precise control of liquid crystal behavior at the micro-scale while driving innovation in optical devices, sensing technologies, and related fields. The distinctive molecular arrangement and optical properties of liquid crystals have broadened the scope of microfluidic applications, revealing diverse physical phenomena and complex fluid dynamics. This paper provides a comprehensive review of recent advancements in liquid crystal microfluidics, with a particular emphasis on commonly used liquid crystal materials and their applications within microfluidic systems. It also examines the impact of microchannel surface functionalization on liquid crystal orientation and explores the interplay between liquid crystal flow and molecular orientation. Finally, the paper discusses the applications of liquid crystal microfluidics in optical components, sensors and bio-detection, and anticipates future development trends and challenges in this field.