Dementia is characterized by a progressive deterioration in cognitive functions and behavioral problems. Due to its importance, in the domain of Internet of Things (IoT), where physical objects are connected to the internet, a myriad of systems have been proposed to support people with dementia, their caregivers, and medical experts. However, the vast and increasing number of research efforts has led to a complex state of the art, which is in need of a methodological analysis and a characterization of its key aspects. Based on the PRISMA guidelines, this article presents a systematic review aimed at investigating the state of the art of the IoT in dementia regardless of the dementia category and/or its cause. Articles published within the period of January 2017 to November 2022 were searched in well-known scientific databases. The searches retrieved a total of 2733 records, which were narrowed down to 104 relevant studies by applying inclusion, exclusion, and quality criteria. A set of 13 research questions at the intersection of IoT and dementia were posed, which guided the analysis of the selected studies. The systematic review contributes (i) an in-depth methodological analysis of recent and relevant IoT systems in the domain of dementia; (ii) a taxonomy that identifies, characterizes, and categorizes key aspects of IoT research focused on dementia; and (iii) a series of future work directions to advance the field of IoT in the dementia domain.