1>I have a 1 step review/edit workflow based on document type having 'User X' and 'User Y' in the review step.
2>I have a custom metadata drop down 'Type' having options 'A' and 'B; in it. Whenever 'Type A' is selected the document should go to User X for review and whenever 'Type B' is selected the document should go to 'User Y' for review.
Sounds like you have to write a script to look at the metadata value, and based on which is selected call wfAddUser to select that user. I would suggest putting User X and User Y in different alises so that way you can edit the alises instead of having to go into the script and keep updating it if these users will change a lot.