The valency of an element indicates
 

•  Valence is the number of hydrogen atoms which can combine with or replace (directly or indirectly) one of the element's atoms.
• When Lithium reacts with hydrogen, it loses one electron. So, its valency is 1. 
• When Magnesium reacts with Hydrogen, it loses 2 electrons. So, the valency here is 2. 

                    ${\mathrm{MgH}}_2\to \mathrm{valency} \mathrm{of} \mathrm{Mg}=2$.