Hello Aniket
There are essentially two parts to the configuration of MD5 authentication for OSPF. One is the configuration of the parameters themselves such as key number and password. This is performed on the interface in question with the command ip ospf message-digest-key X md5 password.
The second part to the configuration has to do with the actual activation of the functionality. This can be done in two ways:
One is to activate the authentication functionality on a per interface basis. This involves implementing the ip ospf authentication message-digest command on every interface where you configure OSPF authentication.
The other option is to activate the authentication functionality on a per area basis, so all interfaces in the area are activated with authentication. This can be done with the command area X authentication message-digest where X is the area for which you want to activate it.
I hope this has been helpful!
Laz