B200 Captain reported having to abruptly avoid a ground conflict with another aircraft while taxiing to the assigned runway. ATC was unaware the other aircraft had stopped on the taxiway instead of the hold-short lines for the runway.

Narrative

Narrowly avoided a ground collision with another aircraft. We were cleared to Runway XX via Taxiway XX on the Ground Control frequency note 10-9 Jepp chart. As we were approaching [Taxiway] XY we contacted the Tower and advised the controller that we would be ready for departure at the end of Runway XX. The Tower acknowledged us but made no mention of us being number two for takeoff. Unbeknownst to us there was a single engine Cessna preceding us to Runway XX as well. We did not hear any radio transmission or see any other aircraft on the way to Runway XX. Just past [Taxiway] XY in the farthest reach of our taxi light beam was the Cessna holding short of the hold lines for the approach end of Runway XY. I suddenly and aggressively applied the brakes and came to a stop very close to rear ending the Cessna. The Tower had no awareness that the Cessna had stopped on Taxiway XX at that point instead of holding short of Runway XX at its hold lines. Directly in front of us the Cessna made a narrow profile and the area we were taxiing in was very dark. Runway XY was not open and aircraft using Runway XX are expected to round the corner at the end of Taxiway XX and hold short of [Runway] XX perpendicular to the runway. The Cessna may have been confused; and the Tower may have lost situational awareness of the Cessna's position and may not have been aware that the pilot stopped on [Taxiway] XX.Cause: poor situational awareness by ATC and lack of good communication. Also; lack of situational awareness and airport layout familiarity by the preceding aircraft.Suggestions: better communication by ATC. It would be helpful if after informing the Tower that an aircraft is ready for departure; ATC would state something like 'Roger. Hold short of Runway XX... number 2 for departure behind the preceding aircraft.'