Batteries play a crucial role as energy storage devices across various industries. However, achieving high performance often comes at the cost of safety. Continuous monitoring is essential to ensure the safety and reliability of batteries. This paper investigates the advancements in battery monitoring technology, focusing on fiber Bragg gratings (FBGs). By examining the factors contributing to battery degradation and the principles of FBGs, this study discusses key aspects of FBG sensing, including mounting locations, monitoring targets, and their correlation with optical signals. While current FBG battery sensing can achieve high measurement accuracies for temperature (0.1 °C), strain (0.1 με), pressure (0.14 bar), and refractive index (6 × 10−5 RIU), with corresponding sensitivities of 40 pm/°C, 2.2 pm/με, −0.3 pm/bar, and −18 nm/RIU, respectively, accurately assessing battery health in real time remains a challenge. Traditional methods struggle to provide real-time and precise evaluations by analyzing the microstructure of battery materials or physical phenomena during chemical reactions. Therefore, by summarizing the current state of FBG battery sensing research, it is evident that monitoring battery material properties (e.g., refractive index and gas properties) through FBGs offers a promising solution for real-time and accurate battery health assessment. This paper also delves into the obstacles of battery monitoring, such as standardizing the FBG encapsulation process, decoupling multiple parameters, and controlling costs. Ultimately, the paper highlights the potential of FBG monitoring technology in driving advancements in battery development.