Envisioned use cases of unmanned aerial vehicles (UAVs) impose new service requirements in terms of data rate, latency, and sensing accuracy, to name a few. If such requirements are satisfactorily met, it can create novel applications and enable highly reliable and harmonized integration of UAVs in the 6G network ecosystem. Towards this, terahertz (THz) bands are perceived as a prospective technological enabler for various improved functionalities such as ultra-high throughput and enhanced sensing capabilities. This paper focuses on THzempowered UAVs with the following capabilities: communication, sensing, localization, imaging, and control. We review the potential opportunities and use cases of THz-empowered UAVs, corresponding novel design challenges, and resulting trade-offs. Furthermore, we overview recent advances in UAV deployments regulations, THz standardization, and health aspects related to THz bands. Finally, we take UAV to UAV (U2U) communication as a case-study to provide numerical insights into the impact of various system design parameters and environment factors.