On-line monitoring of the machining processes provides to detect the amount and type of tool wear which is critical for the determination of remaining useful lifetime of cutting tool. According to Industry 4.0 revolution, the machining performance in terms of cutting forces, surface roughness, power consumptions, tool wear, tool life, etc. needs to be automatically monitored because the unfavorable conditions in machining cause chatter vibrations, tool breakage, and dimensional accuracy. Therefore, the usage of advanced sensor systems plays a key role in achieving the improved machining characteristics in terms of less human effort, errors, production time, etc. and fulfills the requirement of Industry 4.0. Hence, this review presents the holistic knowledge of online detection systems including sensors and signal processing software preferred in mechanical machining operations. Initially, this paper is starting with the up-to-date literature introduction section followed by type of sensors used in machining, online detection methods in machining, challenges and suggestions, etc. Eventually, the article concluded the findings and future remarks especially focused on the theme of Industry 4.0. In the end, it is worthy to mention that this review paper is very helpful for researchers and academicians working in the industrial sectors.