We have fabricated $Er_xY_{2-x}SiO_5$ film and strip-loaded waveguides. For high gain optical device application, we found the optimized condition of optical loss of $Er_xY_{2-x}SiO_5$ thin film. The propagation loss of 1150$\deg$C annealed and $1200\degC$ annealed waveguides are 2.2$\pm0.2 dB/cm and 10.5$\pm$0.9 dB/cm, respectively. Although 1200$\deg$C annealed film has strong PL intensity, large grain and rough surface of the film lead to non-negligible scattering loss. For these reason, we used 1150$\deg$C annealed $Er_xY_{2-x}SiO_5$ thin film for waveguide application. We have reduced cooperative upconversion of $Er_xY_{2-x}SiO_5$ thin film fabricated by ErY mixed target. The mode overlap factor between Er profile and TE mode signal light profile at 1536 nm is 0.5. Absorption and emission cross section obtained at 1529 nm are $0.9x10^{-20} cm^2$. This value is larger than erbium doped silica. The internal net gain of $Er_xY_{2-x}SiO_5$ waveguide fabricated by ErY mixed target is positive above 1538 nm and the signal enhancement at 1529 nm saturates at 11.5 dB. The maximum inversion level of waveguide was found to be 0.4~0.5. The low gain and inversion level in waveguide are attributed to upconversion that depletes the population of $Er^{3+}$ ions in the first excited state $(^4I_{13/2})$. We expect that more investigation for lower values of cooperative upconversion coefficient can result in compact and high gain optical device using $Er_xY_{2-x}SiO_5$ thin films.