Terahertz (THz) radiation (0.1–10 THz) has demonstrated great significance in a wide range of interdisciplinary applications due to its unique properties such as the capacity to penetrate optically opaque materials without ionizing effect, superior spatial resolution as compared to the microwave domain for imaging or ability to identify a vast array of molecules using THz fingerprinting. Advancements in generation and detection techniques, as well as the necessities of application-driven research and industry, have created a substantial demand for THz-range devices and components. However, progress in the development of THz components is hampered by a lack of efficient and affordable characterization systems, resulting in limited development in THz science and technology. Vector Network Analyzers (VNAs) are highly sophisticated well-established characterization instruments in the microwave bands, which are now employed in the lower end of the THz spectrum (up to 1.5 THz) using frequency extender modules. These modules are extremely expensive, and due to the implementation of hollow metallic waveguides for their configuration, they are narrowband, requiring at least six modules to achieve a frequency coverage of 0.2–1.5 THz. Moreover, they are susceptible to problems like material losses, manufacturing and alignment tolerances etc., making them less than ideal for fast, broadband investigation. The main objective of this thesis is to design a robust but cost-effective characterization system based on a photonic method that can characterize THz components up to several THz in a single configuration. To achieve this, we design architectures for the Photonic Vector Network Analyzer (PVNA) concept, incorporating ErAs:In(Al)GaAs-based photoconductive sources and ErAs:InGaAs-based photoconductive receivers, driven with a femtosecond pulsed laser operating at 1550 nm. The broadband photonic devices replace narrowband electronic ones in order to record the Scattering (S)-parameters in a free space configuration. Corresponding calibration and data evaluation methods are also developed. Then the PVNAs are configured, and their capabilities are validated by characterizing various THz components, including a THz isolator, a distributed Bragg Reflector, a Split-Ring Resonator array and a Crossed-Dipole Resonator (CDR) array, in terms of their S-parameters. The PVNAs are also implemented to determine the complex refractive index or dielectric permittivity and physical thickness of several materials in the THz range. Finally, we develop an ErAs:In(Al)GaAs-based THz transceiver and implement it in a PVNA configuration, resulting in a more compact setup that is useful for industrial applications. The feasibility of such systems is also verified by characterizing several THz components. The configured systems achieve a bandwidth of more than 2.5 THz, exceeding the maximum attainable frequency of the commercial Electronic Vector Network Analyzer (EVNA) extender modules. For the 1.1-1.5 THz band, the dynamic range of 47-35 dB (Equivalent Noise Bandwidth (ENBW) = 9.196 Hz) achieved with the PVNA is comparable to the dynamic range of 45-25 dB (ENBW = 10 Hz) of the EVNA. Both amplitude and phase of the S-parameters, determined by the configured PVNAs, are compared with simulations or theoretical models and showed excellent agreement. The PVNA could discern multi-peak and narrow resonance characteristics despite its lower spectral resolution (∼3-7 GHz) compared to the EVNA. By accurately determining the S-parameters of multiple THz components, the transceiver-based PVNA also demonstrated its exceptional competence. With huge bandwidth and simpler calibration techniques, the PVNA provides a potential solution to bridge the existing technological gap in THz-range characterization systems and offers a solid platform for THz component development, paving the way for more widespread application of THz technologies in research and industry.