Cholesteric liquid crystals (CLCs) exhibit unique helical superstructures that selectively reflect circularly polarized light, enabling them to dynamically respond to environmental changes with tunable structural colors. This dynamic color-changing capability is crucial for applications that require adaptable optical properties, positioning CLCs as key materials in advanced photonic technologies. This review focuses on the mechanisms of dynamic color tuning in CLCs across various forms, including small molecules, cholesteric liquid crystal elastomers (CLCEs), and cholesteric liquid crystal networks (CLCNs), and emphasizes the distinct responsive coloration each structure provides. Key developments in photochromic mechanisms based on azobenzene, dithienylethene, and molecular motor switches, are discussed for their roles in enhancing the stability and tuning range of CLCs. We examine the color-changing behaviors of CLCEs under mechanical stimuli and CLCNs under swelling, highlighting the advantages of each form. Following this, applications of dynamic color-tuning CLCs in information encryption, adaptive camouflage, and smart sensing technologies are explored. The review concludes with an outlook on current challenges and future directions in CLC research, particularly in biomimetic systems and dynamic photonic devices, aiming to broaden their functional applications and impact.