Fiber-optic sensing technology is best adapted to health monitoring and evaluation of power grids because of its immunity of electromagnetic interference, capabilities of multiplexing and distributed sensing, and tolerance to harsh environments. We review key fiber-optic sensing technologies, including fiber Bragg gratings, fiber-optic interferometers, optical time domain reflectometries, and their applications in three main parts of power grids, transformers, power towers, and overhead transmission lines, during the past 20 years. In particular, optical fiber composite overhead ground wire and optical phase conductor applied in power grids are the areas of great potential to go further. The perspectives of an intelligent fault diagnosis subsystem for power grids based on a fiber-optic sensing network are discussed, and related on-going work is described. The review shall be of benefit to both engineers and researchers in power grids and fiber-optic sensing.