The 2023 Alzheimer's Disease International report warns that Alzheimer's disease (AD) is an escalating global challenge, with estimates suggesting more than 150 million cases worldwide by 2050 and about 13.8 million in the United States by 2060. AD is often linked with cholinergic dysfunction and increased acetylcholinesterase (AChE) activity, exacerbated by chronic neuroinflammation and oxidative stress. This study investigates the potential of Aeginetia indica whole plant methanolic extract (AiME) and its phytochemicals as natural AChE inhibitors (AChEIs) for AD management. AiME (IC50 = 176.586 ± 5.96 μg/mL) exhibited moderate, dose-dependent antioxidant activity compared to standard ascorbic acid (IC50 = 38.866 ± 10.059 μg/mL) in the DPPH antioxidant assay. The other two antioxidant assays, reducing power activity (RPA) and ferric-reducing antioxidant power (FRAP), also followed a similar trend (AiME: EC50 = 358.249 ± 16.605 μg/mL, EC50 = 39.467 ± 9.046 μg/mL), respectively, compared to standard ascorbic acid (Std: EC50 = 53.778 ± 0.624 μg/mL, Std: EC50 = 48.986 ± 0.512 μg/mL). AiME at all doses showed significant inhibition (p < 0.001) of paw edema in animals (in vivo) compared to the negative control group. Notably, AiME displayed better AChE inhibitory activity (IC50 = 1.636 ± 0.067 mg/mL) compared to standard rivastigmine (IC50 = 2.344 ± 0.151 mg/mL) in the acetylcholinesterase assay. LCMS/MS analysis identified 16 phenolic compounds, and GCMS analysis revealed 23 phytoconstituents in AiME. Molecular docking studies revealed acteoside, acacetin, and luteolin as promising leads, exhibiting favorable binding affinities and hydrogen bond interactions with the AChE active site. The structural stability and rigidity of our top two lead compounds, acteoside and acacetin, were evaluated using 100 ns molecular dynamics simulations, where they exhibited lower root mean square deviation values, with the acteoside-AChE complex ranging from 0.1 to 0.35 nm and the acacetin-AChE complex ranging from 0.1 to 0.4 nm, indicating notable stability. This study highlights the potential of A. indica and its phenolic constituents as natural alternatives for AD management, offering a multi-pronged mechanistic pathway through AChE inhibition, anti-inflammatory, and antioxidant properties.