The integration of blockchain technology with energy community trading represents a promising frontier in the energy sector, offering innovative solutions to challenges in energy trading and management. This review conducts a systematic investigation of the potential benefits, applications and challenges of blockchain in facilitating multi-level energy trading for energy communities. Firstly, the background information of the blockchain and Internet of Things (IoT) is provided, along with an elucidation of their integration architecture for energy communities. Building on this foundation, the applications of blockchain in transactive energy communities are analyzed from three perspectives: community-level energy trading, regional-level energy trading, and grid-level energy trading. Following that, the currently known projects and pilots on blockchain-based transactive energy are comprehensively summarized. Finally, key challenges in implementing blockchain-based energy trading for local energy communities are discussed, providing guidance for future research.