The role of coherency strain at the matrix/precipitate interface toward hardening of bulk polycrystalline "ceramic alloys" has been established here. Formation of "near ideal" bulk polycrystalline ceramic microstructure characterized by the presence of uniformly distributed coherent "ultra-fine" MgCr2O4 particles (size: similar to 25 nm) within matrix (MgO) grains was achieved via solid-state precipitation during aging treatment of bulk supersaturated MgO-Cr2O3 solid solutions (formed during pressureless sintering in air, followed by fast cooling). The as-aged MgO-MgCr2O4 "ceramic alloys" exhibited hardness increment by similar to 73% over that of phase pure bulk MgO upon aging for just 10 hours at 1000 degrees C in air. Evidences toward the presence of significant coherency strains across the MgO/MgCr2O4 coherent interfaces were obtained with transmission electron microscopy. Analysis based on hardening mechanisms and comparisons with MgO-MgFe2O4 system, having lesser hardening due to lower misfit strain at MgO/MgFe2O4 coherent interfaces (despite greater content of second-phase particles), confirm the dominant role of coherency strains toward hardness enhancement in "ceramic alloys."