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Terahertz (THz) communications are celebrated as key enablers for converged localization and sensing in future sixth-generation (6G) wireless communication systems and beyond. Instead of being a byproduct of the communication system, localization in 6G is indispensable for location-aware communications. Towards this end, we aim to identify the prospects, challenges, and requirements of THz localization techniques. We first review the history and trends of localization methods and discuss their objectives, constraints, and applications in contemporary communication systems. We then detail the latest advances in THz communications and introduce THz-specific channel and system models. Afterward, we formulate THz-band localization as a 3D position/orientation estimation problem, detailing geometry-based localization techniques and describing potential THz localization and sensing extensions. We …