Pyrochlore materials with novel properties are in demand with multifunctional applications such as optoelectronics, scintillator materials, and theranostics. Many reports have already indicated the importance of the synthesis technique for Nd2Zr2O7 (NZO) nanoparticles (NPs); however, no explanation has been provided for the reason behind the nature of its phase selectivity. Here, we have explored the structural and optical properties of the NZO NPs synthesized by a molten salt synthesis method. We have synthesized size-tunable NZO NPs and correlated the particle size with their structural behavior and optical performance. All NZO NPs are stabilized in defect fluorite phase. Neutron diffraction provided insight on the behavior of oxygen in the presence of heavy atoms. We have collected bright amalgam of blue and green emission on UV irradiation due to the presence of oxygen vacancies from these NPs. We have carried out in situ XRD and Raman investigations to observe the temperature-induced phase transformation in a controlled argon environment. Interestingly, we have not observed phase change for the molten salt synthesized fluorite NZO NPs; however, we observed phase transformation from a precursor stage to pyrochlore phase by in situ XRD directly. These observations provide a new strategy to synthesize nanomaterials phase-selectively for a variety of applications in materials science.