Silicon carbide (SiC), as a third-generation semiconductor material, is recently used in high-voltage and high-power devices for new energy vehicles and other fields due to its superior electrical properties, high temperature resistance and high chemical inertness. Inductively coupled plasma (ICP) etching, as one of the dry etching technologies, demonstrates many useful advantages and has become an important fabrication process method in high volume manufacturing process of SiC power devices. This review starts with an introduction of the configuration of ICP set up and its working principle for etching. The influences of different mask materials in the etching process on selectivity and surface quality are reviewed. An analysis of undesirable etching morphology and surface damages induced by ICP etching is systematically reviewed. A comprehensive comparison of four key process parameters, namely type of working gas, ICP power, RF power and chamber pressure on the effect of etch rate and surface quality is reviewed.