Terahertz technology has a wide range of potential applications in many areas of basic research and applied research. Source of terahertz wave is the key of terahertz technology development. Among many terahertz radiation sources, terahertz wave parametric oscillator has characteristics of quasi-continuous output mode, small size, continuous frequency tunable, narrow line width, high spatial and temporal coherence and working at room temperature. It is great concerned by scientific researchers.The nonlinear optical 5%mol MgO: LiNbO_3 crystal is used to generate THz wave with a parametric process in experiment. Its threshold valve reduces about 30% by comparison with LiNbO_3 crystal in the same configuration. The output of THz wave energy increase about 12.4% at the pumping energy of 18mJ/pulse. It indicates that the output energy can be effectively increased and the pump threshold can be effectively reduced by doping valence relatively stable Mg~(2+) in LiNbO_3 crystal to generate THz wave with parametric process. In addition, the gain and angle tuning of terahertz wave parametric oscillator which is made up of nonlinear optical 5%mol MgO: LiNbO_3 crystal is calculated. Curves of gain and angle tuning are showed. The gain is improved and range of angle tuning is widened.Output performance of THz wave parametric radiation source can be effectively improved by doping 5%molMg~(2+) in LiNbO_3 crystal. Its mechanism is: There is a lot of defect in LiNbO_3 crystal such as Nb_(Li), V_(Li), small-polaron, bi-polaron, F~(2+), F~(3+), etc that is sensitive centre of photorefractive effect. So it has a significant photorefractive effect. The pump light energy transfers to scattering light because of light-induced scattering and the lens effect of pump light in LiNbO_3 crystal. So using LiNbO_3 crystal to generate THz wave has a higher threshold valve and lower output energy. When valence stability Mg~(2+) is doped in lithium niobate crystal, lithium niobate crystal lattice structure is not basically change. In LiNbO_3 crystal strong A_1(TO) vibration mode and E(TO) vibration mode are determined by the main oxygen octahedron (NbO_3) characteristics of group. Mg-doped has a little effect on this. When the Mg~(2+) is doped to the concentration threshold value (5%mol), Nb_(Li) goes back to niobium space and impurity ions do same things. So the ability of donor and acceptor charges correlated with lithium vacancies has lost. The photorefractive effect in LiNbO_3 crystal is restrained effectively. It is reduced that pumping energy transfer to scattering light. It increases that pumping energy transfers to THz wave energy and idle wave energy. So it has a better output performance that LiNbO_3 crystal of 5%mol Mg~(2+) doped is used to generate THz wave with a parametric process.