This paper explores the integration of Extended Reality (XR) technologies, including Virtual Reality (VR) and Augmented Reality (AR), into citizen participation processes, a crucial yet challenging area in urban planning and smart city management. Despite the potential of XR, the existing literature remains scattered and often lacks practical application guidelines, hindering a full understanding of XR's potential to enhance democratic engagement. Through a systematic literature review, this study consolidates existing knowledge with an e-participation theoretical lens, spanning various disciplines, to provide a cohesive analysis of XR's role and potential. The study critically examines the empirical literature and suggests a conceptual framework consisting of several analysis themes: the contextual elements driving the use of XR by stakeholders, the characteristics of the technologies used, and outcomes of the use of XR. Leveraging this framework, we outline six future research directions, emphasizing the need to longitudinally study organizational implications of XR use beyond punctual user studies, extending the use cases to other political areas beyond urban planning, and investigating the creation of new realities as channels for effective and creative participation. The conceptual framework is also translated to a canvas for practitioners for the design of future XR-enabled participation initiatives.