Magnetic fluid hyperthermia (MFH) enables the controlled release of therapeutical heat using magnetic nanoparticles (MNP) as heating agents. The MNP are triggered to transform the energy of an externally applied alternating magnetic field into heat via relaxation of their magnetic moments. This heat is then dissipated into their immediate surroundings, e.g. a tumor, facilitating organ confined cancer treatment. While offering great potential in minimally-invasive localized cancer therpy, MFH efficacy relays on MNP efficiency to generate heat in interaction with the biological environment. Among other things, MNP are restricted in their mobility and form clusters under these physiological conditions, overall alternating their magnetic relaxation and heating behavior. Here, current approaches ranging from theorectical modelling to preclinical application of MFH are presented, specifically addressing MNP heating under these alternations. Particle heating modelling techinques are developed, predicting sets of parameters matching field amplitude and frequency as well as MNP size and magnetic properties for optimized MFH efficiency. The MNP interaction with tumor cells and its impact on heating efficiency is quantified and validated with heating experiments on MNP immobilized in hydrogels, mimicking the settings in cellular environments such as binding to the cell membranes and agglomeration inside lysosomes. These hydrogels have tunable materials properties that allow to quantify the effects of clustering and immobilization on the particle heating. Further, the general feasibility of MFH is addressed with in-vitro MFH experiments carried out on pancreatic tumor cells. Beyond the obvious bulk temperature cytotoxic effect, the so-called nanoheating effect is demonstrated. This effect underscores the use of MNP as therapeutical agents, which, combined with their use as diagnostic agents in magnetic particle imaging (MPI), display a promising theranostic platform for future biomedical applications. To this end, preliminary particle studies for the combined application in MPI and MFH are discussed.