In present work, we have reported the room temperature ferromagnetism in lanthanum (La)-doped magnesium oxide (MgO) nanoparticles. It has been found that the magnetic character increases with dilute concentration of La up to 4% and decreases afterwards. The conception of ferromagnetic ordering in such systems is understood on the basis of oxygen intrinsic defects in the host matrix which was elucidated through X-ray photoelectron spectroscopy (XPS) measurements. XPS studies infer that Mg 2p edge is not altered with the incorporation of La ions in the host lattice. However, effective variation in the intensity of O1s edge confirms the presence of defects in the material. EPR (electron paramagnetic resonance) signal peak to peak line width increases with increase in La content and supports the defects present in the material which in turn is related with the change in particle size and saturation magnetisation. These results demonstrate the key role played by defects in stabilising the room temperature ferromagnetic ordering in MgO nanoparticles.