Capsicum annuum L. is a significant horticulture crop known for its pungent varieties and used as a spice. The pungent character in the plant, known as capsaicinoid, has been discovered to have various health benefits. However, its production has been affected due to various exogenous stresses, including diseases caused by a soil-borne pathogen, Pythium spp. predominantly affecting the Capsicum plant in younger stages and causing damping-off, this pathogen can incite root rot in later plant growth stages. Due to the involvement of multiple Pythium spp. and their capability to disperse through various routes, their detection and diagnosis have become crucial. However, the quest for a point-of-care technology is still far from over. The use of an integrated approach with cultural and biological techniques for the management of Pythium spp. can be the best and most sustainable alternative to the traditionally used and hazardous chemical approach. The lack of race-specific resistance genes against Pythium spp. can be compensated with the candidate quantitative trait loci (QTL) genes in C. annuum L. This review will focus on the epidemiological factors playing a major role in disease spread, the currently available diagnostics in species identification, and the management strategies with a special emphasis on Pythium spp. causing damping-off and root rot in different cultivars of C. annuum L.