Microfluidics-based biochips are soon expected to revolutionize biosensing, clinical diagnostics and drug discovery. Robust off-line and on-line test techniques are required to ensure system dependability as these biochips are deployed for safety-critical applications. Due to the underlying mixed-technology and mixed-energy domains, biochips exhibit unique failure mechanisms and defects. We first relate some realistic defects to fault models and observable errors. We next set up an experiment to evaluate the manifestations of electrode-short faults. Motivated by the experimental results, we present a testing and diagnosis methodology to detect catastrophic faults and locate faulty regions. The proposed method is evaluated using a biochip performing real-life multiplexed bioassays.