Wavelength demodulation is the key technology of fiber Bragg grating sensor and is also the key of the commercialization of such devices. In this paper, the unique superiority of the fiber Bragg grating as a sensor is analyzed. The basic principle of fiber Bragg grating sensing is given. The wavelength demodulation methods such as matching demodulation, tunable laser, interference demodulation and filtering demodulation used at home and abroad in recent years are presented in detail. The corresponding system design schemes are given and their advantages and disadvantages are discussed. The application examples of fiber Bragg grating sensors in the health inspection of large buildings such as bridges and dams are described. Finally, the challenges needed to be solved in the further commercialization of fiber grating sensors are discussed and the prospect of fiber grating sensors is given.