Wireless sensor network (WSN)-based Internet of Things (IoT) applications suffer from issues including limited battery capacity, frequent disconnections due to multihop communication and a shorter transmission range. Researchers propose different but isolated clustering and routing solutions that are inefficient in terms of energy efficiency and network connectivity in IoT-based WSNs. In this work, we emphasize the importance of considering the context of IoT applications that have further requirements for dedicated data collection per node. We address two interlinked issues, clustering and routing, in a large-scale IoT-based WSN. We propose an improved clustering and routing (ICR) protocol to jointly solve both of these issues. Improved clustering and routing provide area-based clustering derived from the transmission range of network nodes. This clustering also develops a strong network backbone that provides fail-over-proof routing. An efficient routing path is achieved by finding the minimal hop count with the availability of alternate routing paths. The results are compared with state-of-the-art benchmark protocols, Joint Clustering and Routing (JCR), Low Energy Adaptive Hierarchical Clustering (LEACH) and other recent protocols. Theoretical and simulation results demonstrate reliable network topology, improved network lifetime, efficient node density management and improved overall network capacity.