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The emergence of Internet of Things (IoT) systems has provided another round of distributed, real-time, data-rich applications in different domains by enabling pervasive data collection and automation. However, traditional monolithic system designs struggle to accommodate the heterogeneity, scalability, and dynamic behavior of IoT environments. This paper explores how microservices architecture can enhance IoT systems by promoting modularity, resilience, and independent scalability. We discuss the synergy between IoT and microservices, and present the potential challenges and mitigation strategies. In these circumstances, using microservices and containerization allows IoT functionalities to be decomposed into fine-grained, loosely coupled, and independently deployable services. This modularization enables efficient continuous integration/ continuous delivery (CI/CD) practices, improves fault isolation, and guarantees system-wide robustness without compromising the performance of the IoT ecosystem. This paper explores the technical foundations and benefits of this architectural paradigm, focusing on smart agriculture as a case study.