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Metamaterials, which are artificially engineered materials, have significantly expanded the possibilities of wave manipulation. Rapid advancements in metamaterial design and fabrication have fostered a flourishing field and have established a solid foundation for theoretical research. Theoretical studies on metamaterials not only drive the advancement of the field itself, but also offer new opportunities for gaining deeper insights into the fundamental nature of electromagnetic waves and provide a novel platform for probing the intrinsic properties of natural materials. This review systematically summarizes the fundamental theories of metamaterials, including those that describe electromagnetic wave propagation inside and outside metamaterials, as well as those used to determine their effective electromagnetic parameters. Taking metamaterial fundamental theory as the central perspective, this study examines the underlying assumptions, inherent limitations, interrelationships among different theories, and both current advances and potential future developments. The purpose of this review is to organize and delineate the theoretical foundations of metamaterials, thereby outlining the overall landscape of metamaterial theory and facilitating the establishment of a comprehensive and coherent theoretical framework. In addition, this review serves as a useful reference for newcomers in the field, helps experienced researchers identify gaps or overlooked aspects, and provides researchers from related disciplines with insights into potential avenues for interdisciplinary integration.