Abstract: Given the coexistence of resource endowment constraints, fragmented agricultural operations, and the rapid integration of digital technologies in China, this study systematically examines the underlying rationale, practical constraints, and evolutionary direction of smart agriculture from the perspectives of technological, organizational, and institutional logic. It further explores the practical pathways for advancing smart agriculture in China. The results indicate that China’s smart agriculture is evolving from an application expansion stage dominated by technological integration toward a stage of deeper development centered on institutional restructuring and system transformation. The underlying mechanism lies in reducing information and organizational costs, thereby reconstructing fragmented agricultural production units into a computable and collaborative system. This transformation promotes a shift from experience-driven agriculture to data- and cognition-driven agriculture, and from local optimization to system optimization. Furthermore, the development of smart agriculture in China should not be confined to breakthroughs in isolated application scenarios. Instead, it should evolve toward a comprehensive development path characterized by universal access, full-chain integration, and nationwide coverage. This process essentially reflects the coordinated evolution of institutionalized data elements, platform-based organizational systems, and scenario-oriented technological systems. Looking ahead, China should promote key technological breakthroughs, strengthen the agricultural data infrastructure, reshape organizational forms, and improve institutional mechanisms. Meanwhile, efforts should focus on facilitating the circulation of agricultural data elements, lowering participation barriers for smallholder farmers, enhancing the adaptability of technologies to diverse agricultural scenarios, and establishing sustainable business and financial ecosystems. These measures will support the formation of a stable and well-functioning systemic structure for smart agriculture. The findings deepen the understanding of the development logic and evolutionary mechanism of smart agriculture in China and provide a theoretically grounded framework for advancing agricultural modernization and building China into an agricultural powerhouse through smart agriculture.