An optical chaos and hybrid wavelength division multiplexing/time division multiplexing (WDM/TDM) based large capacity quasi-distributed sensing network with real-time fiber fault monitoring is proposed. Chirped fiber Bragg grating (CFBG) intensity demodulation is adopted to improve the dynamic range of the measurements. Compared with the traditional sensing interrogation methods in time, radio frequency and optical wavelength domains, the measurand sensing and the precise locating of the proposed sensing network can be simultaneously interrogated by the relative amplitude change (RAC) and the time delay of the correlation peak in the cross-correlation spectrum. Assisted with the WDM/TDM technology, hundreds of sensing units could be potentially multiplexed in the multiple sensing fiber lines. Based on the proof-of-concept experiment for axial strain measurement with three sensing fiber lines, the strain sensitivity up to 0.14% RAC/με and the precise locating of the sensors are achieved. Significantly, real-time fiber fault monitoring in the three sensing fiber lines is also implemented with a spatial resolution of 2.8 cm.