With the rapid growth of the world's population in cities, there is a growing need for innovative approaches to the sustainable use of urban resources, tackling urban problems and increasing the quality of life of citizens. The smart city concept emerges in response to the challenges presented. Although there is no single definition of the concept, information and communication technologies, primarily the Internet of Things – a global infrastructure for the information society that provides advanced services by interconnecting physical and virtual objects – is what all of them have in common. The aim of the paper is, based on a review and analysis of theoretical and research papers by foreign and domestic authors: to explain the concepts of smart city and Internet of Things with accompanying technologies; to present examples of Internet of Things application in smart cities and analyze factors of IoT technology acceptance; to highlight the benefits of the development and application of the Internet of Things on the quality of life of urban residents; to draw attention to the neglect of citizen involvement in decision-making process and the negative effects of such practices; to emphasize the importance of civic education, digital literacy and literacy for smart cities together with the holistic approach in shaping smart cities in the context of the growing impact of technology on our lives.