1. Install Fabric loader 1.16.2
2. put Fabric api and Lithium into mods folder
3. launch the game and The game crashes
   

You seem to have a version mismatch. This is not a bug with Lithium, simply an installation mishap. Perhaps join JellySquid's discord server at https://jellysquid.me/discord so we can debug this?

This is not an issue with Lithium. You are using the wrong version of Lithium for that version of the game.