Although used much more North America than in the UK and other parts of the ESW, smart is nonetheless a frequent alternative to both clever and intelligent, but its meaning is not quite the same; usage seems to be more about some innate quality, and has some similarity with bright (used much more in the UK) – on which more later.
a : mentally alert : bright
b : knowledgeable
c : shrewd <a smart investment>
a : witty, clever <a smart sitcom>
b : pert, saucy <don't get smart with me>
a : being a guided missile <a laser-guided smart bomb>
b : operating by automation <a smart machine tool>
c : intelligent 3
smart (comparative smarter, superlative smartest)
2. Sharp; keen; poignant.
3. Exhibiting social ability or cleverness.
4. Exhibiting intellectual knowledge, such as that found in books.
a smart outfit
6. Cleverly and/or sarcastically humorous in a way that may be rude and disrespectful. Cf: (verb) to smart off; (noun) smarty pants, wise guy, wiseacre, wise-ass; (adjective) cute.
He became tired of his daughter's sarcasm and smart remarks.
Here are the first two definitions:
1. smart 1698 up, 279 down
Knowledgeable, witty, or intelligent. Not a popular thing to be in America these days.
2. smart 1465 up, 497 down
The opposite of George W. Bush.
'George W. Bush is so not smart.'
I included the TU and TD stats because it is rare in UD for a non obscene term to get more than 1000 TU's. The users and contributors to UD were, to start with, mostly rebellious teenagers, but clearly a number of them have both social and political sensibilities!
Webster's definition is really not very helpful. I have only included those definitions that denote types of mental competence. Definition 7, quite an important one IMO, is missing from Wiktionary, whose definition is as confused and disordered as you might expect for a problem word like this. Definitions 2 and 6 really ought to be together, as 6 is a figurative use of 2. Compare 3 and 4 with the definitions I've already given on clever and intelligent. Defininitions of mental competence tend to be rather circular!
UD's first definition is pretty good, since the most generalized usage of smart is as a generic term for mental competence:
"He's a smart guy!" Bob exclaimed.
"Smart clever or smart intelligent?" Alice inquired.
Here's the etymology from the highly esteemed Douglas Harper:
late O.E. smeart "sharp, severe, stinging," related to smeortan (see smart (v.)). Meaning "quick, active, clever" is attested from c.1300, probably from the notion of "cutting" wit, words, etc.; meaning "trim in attire" first attested 1718, "ascending from the kitchen to the drawing-room c.1880." [Weekley] In ref. to devices, "behaving as though guided by intelligence" (e.g. smart bomb) first attested 1972. Smarts "good sense, intelligence," is first recorded 1968. Smart cookie is from 1948; smarty-pants first attested 1941.
There is an alternative etymology but it differs little, for our purposes. The distant origin seems to be a Proto-Indo-European root (smel-) which has to do with burning. The Latin word acer means keen (in the sense of sharp), sharp, quick, swift, and is often used figuratively of a person to mean that he is "quick witted" or clever. This usage of words for sharpness, hotness, stinging or speed as figurative terms for mental competence (especially in social or other high-stress situations) is common to all the languages I know (c.f. the expression "so sharp you'll cut yourself".). This means that the modern sense that you find in Wiktionary's definition 6, smartarse (smart-ass in US English) is probably closest to early uses for mental competence.
However, as I suggested above, modern usage in North America is (outside of the idioms smart-ass, smart cookie, etc) is generally as a generic term, or to single someone or some group out from the others for general mental ability, aside from learning or cleverness:
"I wasn't one of the smart kids." Bob bewailed.
Thinking of your character as smart is not setting him apart in the same way that wise, or clever would, however. Smartness, when applied as a description of a person becomes a description of a personality, as well; the association with being smartly dressed gives the impression of someone whose mental competence includes discipline, and order. Contrast with intuitive, instinctive. A smart guy is a useful, go-to guy when you have a problem, but he isn't overloaded with brains, and won't, therefore, spend months being "fascinated" by a problem that you need a solution for within the next sixty minutes.