Collaborative robots (cobots) represent a transformative advancement in industrial automation, fundamentally changing production paradigms through seamless human-robot interaction. As a cornerstone of Industry 4.0, cobots integrate advanced force/torque sensing, real-time motion control, and machine learning algorithms to enable safe, efficient collaboration in shared workspaces without traditional safety barriers. Their key technological advantages include adaptive impedance control for precise physical interaction, intuitive programming interfaces reducing deployment time by up to 70%, and flexible reconfigurability supporting high-mix, low-volume production. Major industrial applications demonstrate cobots' versatility: in automotive manufacturing, they enable precision tasks like engine component assembly and quality inspection; in electronics, they handle delicate PCB mounting with micron-level accuracy; in pharmaceuticals, they maintain sterile processes during vaccine packaging. Emerging technological frontiers include cognitive human-robot interaction using computer vision, cloud-based swarm coordination for distributed manufacturing, and digital twin integration for predictive maintenance. This comprehensive review analyses: (1) core technological enablers driving cobot capabilities, (2) implementation case studies across key industries, (3) critical safety considerations and ISO/TS 15066 compliance, (4) Applications of Cobots in Industrial Automation and (5) future research directions in AI-enhanced adaptability and human-centric design. The study provides both a technical reference for engineers and strategic insights for manufacturing decision-makers adopting collaborative automation solutions.