Defect, doping and particle size play important roles on the optical performance of nanophosphors. In this study, undoped La₂Zr₂O₇ NPs (LZO) displayed multicolor emission under UV irradiation due to the presence of ionized oxygen vacancies in the band gap. In addition, we explored the effect of particle size of La₂Zr₂O₇:Eu³⁺ (LZOE) NPs on their structure, surface area, photoluminescence, radioluminescence, lifetime and quantum yield. There is progressive decrease in luminescence output and quantum yield as the coprecipitation pH is raised to prepare the single-source precursors for the molten salt synthesis of the NPs. Under X-ray irradiation, the LZOE NPs emit red light highlighting their potential as X-ray scintillator. We explained the experimental observations based on surface defect analogy. The experimentally obtained emission in violet-blue and red optical regions is correlated to defect related emission. High asymmetry ratio suggested low symmetric environment of Eu³⁺ ions in the LZO host and the occupancy of Eu³⁺ ions is more favorable at LaO₈ site compared to ZrO₆ site. Emission spectra of the LZOE also showed favorable host to dopant (Eu³⁺) energy transfer. This work provides a clear picture of making highly efficient red phosphor and X-ray scintillator for applications in optoelectronics and X-ray induced theranostics.