Linlin Li addresses the analysis and design issues of observer-based FD and FTC for nonlinear systems. The author analyses the existence conditions for the nonlinear observer-based FD systems to gain a deeper insight into the construction of FD systems. Aided by the T-S fuzzy technique, she recommends different design schemes, among them the L_inf/L_2 type of FD systems. The derived FD and FTC approaches are verified by two benchmark processes.