Gaze upon this not till you have seen the episode:
What can (and can’t) nanotech do?
Point two here.
Daleks use it to convert the living or dead into their puppets - so they could probably use it to convert them into Daleks, which they do occasionally. But to Daleks, that would be wrong... so their bigotry is the only thing stopping them conquering the universe.
Hope the Cybermen don’t get it.
(A side note - the Daleks pick and choose, and go for genius or strength of will, like the Cybermen sometimes do. Of course, these are the minds most likely to overthrow conversion... which is the other thing stopping them conquering the universe.)