The miniaturized fiber Bragg grating (FBG) demodulation system is a hot research topic in the field of fiber optics sensing. The development of photonic integration technology has given rise to a series of compact FBG demodulation devices. Arrayed waveguide gratings (AWGs) serve as the core components in photonic integrated demodulation systems. Their spectral characteristics have a significant impact on the demodulation performance of photonic integrated FBG demodulation systems. In this study, we designed, simulated, and fabricated an arrayed waveguide grating (AWG) based on a silicon on insulator (SOI) substrate. Test results indicate that this AWG has an on-chip insertion loss of 3dB, crosstalk of less than -20dB, and a 3dB bandwidth of 2.3nm. We constructed a demodulation system based on this AWG, and experimental results show that the system achieves a demodulation accuracy of 34.2pm within a 0.8nm range, with a wavelength resolution of 6pm.