Background: Topical corticosteroids (TCs) are one of the most frequently prescribed medications by dermatologists, yet may lead to an array of side effects due to prolonged and improper use. Because of the easy availability of topical corticosteroids as over-the-counter medications in India, these drugs are misused and abused. Objective: The objective was to determine the extent and the side effect profile of topical corticosteroid misuse/abuse in patients attending the OPD, to determine the demographic data and the reason and source of procuring TCs, and to characterize the dermoscopic findings of TSDF. Materials and Methods: This was a prospective, cross-sectional, clinical study conducted over a period of two years in which a predesigned, questionnaire-based proforma was employed. Patients above the age of fifteen reporting to the OPD giving a history of the application of a steroid cream continuously or intermittently for the minimum duration of four weeks were included in the study. A total of two hundred patients who met the clinical criteria were subjected to dermoscopic examination with a handheld dermoscope (DermLite DL4; 3Gen, U.S.; 10×). Results: A total of 2400 patients (fifteen-year-old or older) were enrolled in the study, in which 65% of the patients were females while 35% were males. Mostly, the patients procured these medicines from the pharmacist or paramedic, followed by general practitioners. The most common indications for which topical preparations were used included acne, followed by photodermatoses and ephelides. Most of the patients used combination creams, followed by potent steroids such as clobetasol propionate and betamethasone valerate. The most common side effects were erythema (74%), followed by photosensitivity (49%), hypertrichosis (47%), telangiectasia (42%), acneiform eruption (33%), contact dermatitis (21%), wrinkles (23.50%), etc. The main findings noticed on dermoscopy were irregularly dilated, branching, tortuous vessels almost interconnecting with each other in 79.78%, followed by hypertrichosis in 56.34%, white structureless areas representing atrophy in 42.33%, red dots in 7.22%, and a reddish background in 92.20%. Conclusion: The rampant use of TCs by patients for a prolonged period of time leads to a variety of side effects. Due to the topographical location, the climate of the valley, and the lighter skin type of the local population, the indications for which TCs were employed in our study group and the side effect profile were unique from the rest of the country. Dermoscopy may play a vital role in improving the diagnostic accuracy of TSDF and help us to differentiate it from close mimics.