Copyright (c) 1982 Christian Freeling

This game is played on a 12x12 square board with the following setup:

WALLS & CASTLES - The green dotted cells in the diagram. The 3x3 areas inside the walls are called the castles.
TURN - On each turn, each player moves one of his pieces.
The King may move to any adjacent empty cell or jump like the chess Knight. 
It may also capture by replacement any enemy piece within its moving range.
However it may not move or capture outside its castle. 
It cannot also move to a cell within the moving range of an enemy piece.
The Rook slides orthogonally any number of empty cells (like the chess Rook).
If a Rook enters the enemy castle, it is promoted to Queen.
The Queen slides orthogonally or diagonally any number of empty cells (like the chess Queen).
Capture - Both the Rook and the Queen only capture when one piece is inside its castle and the other is on top of the castle's wall. 
GOAL - A player wins by checkmating the enemy King.
An example [from here]

Author's words: Black's castle shows a rook on the wall facing a defender inside. In such a situation both have the right to capture. However, in this specific situation only white can capture because the black rook is pinned! This position shows one of the basics of attack. If it were white's turn he could checkmate in two, so let's assume it's black's turn. Let's also disregard the other pieces for a moment and assume the postion around black's castle is part of an actual position. What can black do? Interposing a piece on any of the squares between the black rook and either of the white rooks, would parry the immediate threat. If this isn't possible, black's only option is to move the defending rook towards the pinning one. But this leaves a white rook on the wall attacking three squares inside the castle - literally a thorn in white's side. Needless to say that the white rooks illustrate a basic attacking pattern. It appears in a variety of forms in almost all attacking concepts.

Some words from the author: A basic concept is the promotion sacrifice. It derives from the fact that an attacker, once he is inside the castle (and thus automatically a queen), can only be captured by the King. A King on the side leaves one square unprotected, and a King in the corner three. The sacrifice of a piece to force the King to the side or into the corner, to clear the way for a second piece to promote on an unprotected square, is very common. A queen is worth the sacrifice of a piece anytime! Its strength is illustrated in the same diagram: if it were black's move, the lone queen could checkmate the white king in just two moves. In positional respect, a rook on a square diagonally adjacent to the enemy castle covers two segments of the wall. Needless to say these spots are popular. Finally, every attack eventually draws from defending forces, so a mating attack should drive home.

It's possible to play Chad online in the MindSport's ArenA. There's also a hexagonal variant, HexChad.