Chaos orcs are a race of red orcs that drank from Mannoroth's Chaos Well which caused these orcs to become corrupted. It is possible the chaos orc stage is right before the fel orc stage.
Chaos orcs once were part of the Warsong clan tyhat followed Grom Hellscream's decision to drink from the Chaos Well to become far more powerful in order to defeat or kill Cenarius and his allies, the Shadowleaves, Moonhunters and Nightblades. By drinking from the Chaos Well their sized slightly increased and they turned red.
Chaos orcs are able to use a special type of damage called chaos damage.
Another banner the chaos orcs fought under the Burning Blade clan during the First War. Some of the orcs who passed through the Dark Portal were driven mad, becoming chaos orcs and joining the Burning Blade.
Speculation & TheoriesEdit
There seems to be some level of distinction between chaos orcs and fel orcs.
Grom's chaos orcs did not show the same mutation as the fel orcs. They have not yet grown mutated spines or bony structures backs and arms like those fel orcs. Chaos orcs also lacked the fangs seen on fel orcs in the Outland. Other than being red, chaos orcs looked like regular orcs and could revert back to regular orcs, for example with Grom it was the help of a special ritual of orcish and elven magics.
It can be presumed that with continued exposure to the corruption from Mannoroth's blood they may have mutated into the more physically demonic fel orcs. However, both are created from Pit Lord blood, and some fel orc mobs in Hellfire Peninsula just use the normal orc model colored red instead of the true fel orc model, like Warlord Morkh, who commands confirmed fel orcs. If this is not just a mechanic (for wearing helms, shirts, and such), it shows that there may be 'intermediate' fel orc stages that chaos orcs may be a part of.
There is also a chance that the difference is related to the possibility that "fel orcs" as we know them.
During the Shattering, It appears that chaos orcs appear as one of the random Horde Portal-Sentries that are guarding the Dark Portal for the Horde along with the Alliance. The General Goods Vendor, Quartermaster Dekrok, also has a red skin color. They may be chaos orcs, or they may be fel orcs. Also, they might be another color of mag'har orc.
Most of the Theory & Speculation section was copied off Wowpedia!