Kinetic Monte Carlo simulations were performed to examine mechanisms underlying the formation of Si nanoparticles in Si-rich SiO2. We have determined two important features of the embedded Si nanoparticle growth: "coalescence-like" and "pseudo Ostwald ripening". The former is mainly responsible for fast Si particle growth at the early stage of annealing where the particles are close to each other, while the latter becomes important when the density of particles is low such that they are separated by large distances. The pseudo ripening process takes place several orders of magnitude slower than the "coalescence-like" growth. The predominance of "coalescence-like" behavior in the growth of Si nanoparticles results in a big variation in the particle size in terms of the Si:O ratio. Overall the predicted growth behavior based on our Monte Carlo simulations agrees well with experiments.