Thin films of nanocrystalline MgO were deposited on glass/Si substrates by rf/dc sputtering from metallic Mg, and ceramic MgO targets. The purpose of this study is to identify the differences in the properties, magnetic in particular, of MgO films obtained on sputter deposition from 99.99% pure metallic Mg target in a controlled [Nitrogen + Oxygen partial pressure (O(2)pp)] atmosphere as against those deposited using an equally pure ceramic MgO target in argon + identical oxygen ambience conditions while maintaining the same total pressure in the chamber in both cases. Characterization of the films was carried out by X-ray diffraction, focussed ion beam cross sectioning, atomic force microscopy and SQUID-magnetometry. The 'as-obtained' films from pure Mg target are found to be predominantly X-ray amorphous, while the ceramic MgO target gives crystalline films, (002) oriented with respect to the film plane. The films consisted of nano-crystalline grains of size in the range of about 0.4 to 4.15 nm with the films from metallic target being more homogeneous and consisting of mostly subnanometer grains. Both the types of films are found to be ferromagnetic to much above room temperature. We observe unusually high maximum saturation magnetization (MS) values of 13.75 emu/g and similar to 4.2 emu/g, respectively for the MgO films prepared from Mg, and MgO targets. The origin of magnetism in MgO films is attributed to Mg vacancy (V-Mg), and 2p holes localized on oxygen sites. The role of nitrogen in enhancing the magnetic moments is also discussed.