The toxicity of lithium compounds is a function of their solubility in water.  Lithium ion has central nervous system toxicity.  The initial effects of lithium exposure are tremors of the hands, nausea, micturition, slurred speech, sluggishness, sleepiness, vertigo, thirst, and increased urine volume.  Effects from continued exposure are apathy, anorexia, fatigue, lethargy, muscular weakness, and changes in ecg.  Long-term exposure leads to hypothyroidism, leukocytosis, edema, weight gain, polydipsia/polyuria (increased water intake leading to increased urinary output), memory impairment, seizures, kidney damage, shock, hypotension, cardiac arrhythmias, coma, death.  

Inhalation:  severe irritant and corrosive.  Causes irritation to the respiratory tract and mucous membranes.

Ingestion:  severe irritant and corrosive.  May cause central nervous system effects, circulatory failure and cardiovascular collapse.

Skin:  severe irritant and corrosive.

Eye:  severe irritant and corrosive.

Chronic effects:

Inhalation:  may cause pulmonary edema and lung damage.

Ingestion:  may cause gastrointestinal irritation, renal dysfunction, derangement of neuromuscular activity, diabetes and kidney damage.

Skin:  may be an irritant and corrosive.

Eye:  may cause blurred vision.

During the formation of Li2O, Li atoms transfer their single valence electrons to Oatoms, forming two Li+ ions for every individual O2− ion. The electrostatic force of attraction between oppositely charged ions forms the ionic bonds.

4Li + O2 → 4Li+ + 2O2− → 2Li2O
Lithium oxide is formed along with small amounts of lithium peroxide when lithium metal is burned in the air and combines with oxygen: 4Li + O 2 → 2Li 2O. Pure Li 2O can be produced by the thermal decomposition of lithium peroxide