Paddy-rice cultivation using the traditional continuous flooding method requires much water, up to 2500 L, to produce 1 kg of rice. Decreasing water availability is being exacerbated by climate dynamics, i.e., droughts and rainfall variability negatively affecting food security in developing regions, particularly Africa. Alternate wetting and drying (AWD) practice is a climate-smart water management strategy that, together with puddling (a critical field preparation process), significantly affects soil hydrological and physicochemical regimes, such as soil water dynamics and oxidation states in paddy fields. However, there are limited reviews on the effects and interaction of the AWD duration on hydrological conditions in the paddy-rice rhizosphere continuum under AWD practice at different rice growth stages. Our review synthesizes key scientific literature to examine water management and hydrological properties of paddy soils under AWD practice with climate change and sheds light on why farmers are skeptical in adopting the practice. To develop this paper, we reviewed scientific information from published journal articles, reliable reports, and our knowledge on paddy-rice cultivation and water management with climate change in Asia and Sub-Saharan Africa. Several studies confirm that AWD practice increases water–rice–crop productivity, yields, and reduces methane emissions. Limitations and challenges of AWD irrigation, including changes in soil structure that influence irrigation water application, variations in hydraulic conductivity caused by the duration and frequency of irrigation cycles, and frequent manual water level (WL) monitoring, are discussed. Opportunities to improve the integration of AWD strategies within government policies, irrigation schemes, and farmer acceptance due to skepticism, limited knowledge, and fear of unreliable water hindering adoption are highlighted. Future research suggestions include the following: (i) long-term measurement of water stress indices using infrared thermometers; (ii) seasonal suitability mapping using NDVI, GIS, and remote sensing; and (iii) application of smart sensors based on the Internet of Things (IoT) to address AWD challenges for precision water management in paddy fields with climate change.