In numerous industries such as aerospace and energy, components must perform under significant extreme environments. This imposes stringent requirements on the accuracy with which these components are manufactured and assembled. One such example is the positional tolerance of drilled holes for close clearance applications, as seen in the “EN3201:2008 Aerospace Series – Holes for metric fasteners” standard. In such applications, the drilled holes must be accurate to within ±0.1 mm. Traditionally, this required the use of Computerised Numerical Control (CNC) systems to achieve such tight tolerances. However, with the increasing popularity of robotic arms in machining applications, as well as their relatively lower cost compared to CNC systems, it becomes necessary to assess the ability of robotic arms to achieve such tolerances. This review paper discusses the sources of errors in robotic arm drilling and reviews the current techniques for improving its accuracy. The main sources of errors in robotic arm drilling are related to the robot arm positioning, the drilling processes, and the dimensional accuracy/quality of the workpiece being drilled. This paper focuses on two of these aspects: the robotic arm positioning and the drilling error. Hardware correction systems using vision, encoder and/or a combination of lasers are considered alongside software-based methods such as machine learning. This can implicitly improve the accuracy of robotic arms without any additional hardware. In addition, spatial interpolation techniques such as Kriging are also discussed in the context of gathering calibration data over a grid of points. From this paper, the reader will gain an understanding of the state-of-the-art, future trends and the potential work required to use robotic arms for drilling high-accuracy holes in aerospace applications.