Refers to a situation that escalates into a quarrel or fight, often implying a public or troublesome dispute. Commonly used in phrases like 喧嘩沙汰になる (to turn into a quarrel).
A small argument turned into a fight.
I ended up causing a brawl at the drinking party.
Compound of 喧嘩 (quarrel) and 沙汰 (affair, incident). The exact historical derivation is uncertain, but the combination is conventionally associated with the meaning of a quarrel that becomes a notable incident.