A physical modeling approach was adopted to build a Digital Electro-Hydraulic Control (DEH) system simulation model and the fault models using the SIMULINK tool. This research combined the advantages of the gray system and neural network to build a multi-parameter gray error neural network fault prediction model for the first time. Furthermore, an embedded platform for intelligent fault diagnosis and prediction was developed using an Application Specific Integrated Circuit chip. The results show that the simulation model of the DEH system has good performance. A jam fault, internal leakage, and a device fault could be accurately identified through the fault diagnosis model. The multi-parameter gray error neural network prediction model improves the accuracy of fault prediction. The embedded platform developed by the Application Specific Integrated Circuit chip solves the problem of transmission limitation and insufficient computing power. It realizes the intelligent diagnosis and prediction of DEH system faults and guarantees the regular operation of the DEH system.