Nanocrystalline powders of Ba1-xMgxZr0.1Ti0.9O3 (x = 0.025-0.1) were synthesized via citrate assisted sol-gel method. Interestingly, the one with x = 0.05 in the system Ba1-xMgxZr0.1Ti0.9O3 exhibited fairly good piezoelectric response aside from the other physical properties. The phase and structural confirmation of synthesized powder was established by X-ray powder diffraction (XRD) and Raman Spectroscopic techniques. Two distinct Raman bands i.e., 303 and 723 cm(-1) characteristic of tetragonal phase were observed. Thermogravimetric analysis (TGA) was performed to evaluate the phase decomposition of the as-synthesized Ba0.95Mg0.05Zr0.1Ti0.9O3 sample as a function of temperature. The average crystallite size associated with Ba0.95Mg0.05Zr0.1Ti0.9O3 was calculated using Scherrer formula based on the XRD data and was found to be 25 nm. However, Scanning and Transmission Electron Microscopy studies revealed the average crystallite size to be in the range of 30-40 nm, respectively. Kubelka-Munk function was employed to determine the optical band gap of these nanocrystallites. A piezoelectric response of 26 pm/V was observed for Ba0.95Mg0.05Zr0.1Ti0.9O3 nanocrystal by Piezoresponse Force Microscopy (PFM) technique. Photoluminescence (PL) study carried out on these nanocrystals exhibited a blue emission (470 nm) at room temperature.