The fiber Bragg grating sensor measures the value according to the wavelength variation. Therefore, it is of great significance to improve the wavelength demodulation accuracy of the fiber grating. Most of the traditional demodulation methods have a single structure, which results in poor measurement accuracy for overlapped spectrum and distortion spectrum, and limits the improvement of demodulation accuracy. The high-precision wavelength demodulation method mainly solves the problems of poor system temperature stability and low peak-finding accuracy. This paper introduces the application of fiber grating wavelength demodulation technology in communication, and reviews the high-precision fiber grating wavelength demodulation methods in recent years, including hardware methods of reference fiber gratings, Michelson interferometers and gas cells, and software methods based on neural networks and particle swarms. The principle of each demodulation method and its advantages and disadvantages in the field of fiber grating sensing are described, and the problems and development trends of fiber grating demodulation methods are analyzed.