The objectives of this study were the development of a synthesis technique for highly active nanosized ITO powder and the understanding of the reaction mechanisms of the ITO precursors. The precipitation and agglomeration phenomena in ITO and $In_{2}O_{3}$ precursors are very sensitive to reaction temperature, pH, and coexisting ion species. Excessive $Cl^-$ ion and $Sn^{+4}$ ions had a negative effect an synthesizing highly active powders. However, with a relevant stabilizing treatment the shape and size of ITO and $In_{2}O_{3}$ precursors could be controlled and high density sintered products of ITO were obtained. By applying the reprecipitation process (or stabilization technique), highly active ITO and $In_{2}O_{3}$ powders were synthesized. Sintering these powders at $1500^{circ}C$ for 5 hours produced 97% dense ITO bodies.