We present both an innovative theoretical model and an experimental validation of a molecular gas optically pumped far-infrared (OPFIR) laser at 0.25 THz that exhibits 10× greater efficiency (39% of the Manley-Rowe limit) and 1,000× smaller volume than comparable commercial lasers. Unlike previous OPFIR-laser models involving only a few energy levels that failed even qualitatively to match experiments at high pressures, our ab initio theory matches experiments quantitatively, within experimental uncertainties with no free parameters, by accurately capturing the interplay of millions of degrees of freedom in the laser. We show that previous OPFIR lasers were inefficient simply by being too large and that high powers favor high pressures and small cavities. We believe that these results will revive interest in OPFIR laser as a powerful and compact source of terahertz radiation.