Effective solid waste management depends on household-level segregation, yet this remains inadequate in many low- and middle-income countries. While previous studies emphasize infrastructural and behavioural challenges, this paper highlights an under-recognised factor—terminology and classification ambiguity. To examine how inconsistent and unintuitive waste-related terms, signage, and bin colour codes impede effective source segregation in urban low- and middle-income countries particularly in India and South Asia. A structured narrative review of academic and grey literature, including national policies, municipal regulations, and information-education-communication materials, was conducted to explore how misaligned classification systems affect public understanding and compliance. Households often struggle to categorise waste due to overlapping or poorly defined categories (e.g., dry vs. biodegradable), inconsistent colour codes across jurisdictions, and limited culturally relevant communication. This ambiguity, compounded by spatial and economic constraints, leads to widespread non-segregation, contamination of recyclables, and weak policy implementation. We call for standardised and culturally contextualised classification frameworks with intuitive labelling and harmonised colour coding. Integrating clear, locally resonant communication into governance systems can significantly improve segregation behaviour and sustainability outcomes in urban low- and middle-income countries. Beyond infrastructure and awareness drives, semantic clarity and design of waste communication are crucial for enabling behavioural change. Addressing these overlooked dimensions can strengthen urban resilience, improve policy coherence, and accelerate transitions toward circular economy practices in low- and middle-income countries.