This paper focuses on the fault reconstruction and fault-tolerant control problems of switched fuzzy systems with actuator and sensor faults, where the faults may be fast time-varying and unbounded. The multiple coordinate transformations are introduced, then the reduced-order observer based fault reconstruction method is considered, which can reconstruct the system state, actuator and sensor faults, simultaneously. For the case that there is no disturbance, the LMI conditions are achieved to insure that for any switching signal, the error dynamics can be exponentially stable. Utilizing the estimated fault information, the fuzzy dynamic output feedback fault tolerant controllers are designed to compensate the fault effect and stabilize the systems. The root-mean-square gain is considered to reduce the disturbance influence on fault estimation and fault-tolerant control, in which the zero initial condition is not needed. Finally, simulations are conducted to demonstrate the effectiveness of the considered techniques.