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Magnesium (Mg) has the lowest density of all structural metals and has excellent potential for wide use in structural applications. While pure Mg has inferior mechanical properties; the addition of further elements at various concentrations has produced alloys with enhanced mechanical performance and corrosion resistance. An important consequence of adding such elements is that the saturated Mg matrix can locally decompose to form solute clusters and intermetallic particles, often referred to as precipitates. Controlling the shape, number density, volume fraction, and spatial distribution of solute clusters and precipitates significantly impacts the alloy's plastic response. Conversely, plastic deformation during thermomechanical processing can dramatically impact solute clustering and precipitation. In this paper, we first discuss how solute atoms, solute clusters, and precipitates can improve the mechanical properties of Mg alloys. We do so by primarily comparing three alloy systems: Mg-Al, Mg-Zn, and Mg-Y-based alloys. In the second part, we provide strategies for optimizing such microstructures by controlling nucleation and growth of solute clusters and precipitates during thermomechanical processing. In the third part, we briefly highlight how one can enable inverse design of Mg alloys by a more robust Integrated Computational Materials Design (ICMD) approach.