Terahertz (THz) generation by optical rectification (OR) using tilted-pulse-fronts is studied. A one-dimensional (1-D) model which simultaneously accounts for (i) the nonlinear coupled interaction of the THz and optical radiation, (ii) angular and material dispersion, (iii) absorption, iv) self-phase modulation and (v) stimulated Raman scattering is presented. We numerically show that the large experimentally observed cascaded frequency down-shift and spectral broadening (cascading effects) of the optical pump pulse is a direct consequence of THz generation. In the presence of this large spectral broadening, the large angular dispersion associated with tilted-pulse-fronts which is ~15-times larger than material dispersion, accentuates phase mismatch and degrades THz generation. Consequently, this cascading effect in conjunction with angular dispersion is shown to be the strongest limitation to THz generation in lithium niobate for pumping at 1 textmum. It is seen that the exclusion of these cascading effects in modeling OR, leads to a significant overestimation of the optical-to-THz conversion efficiency. The results are verified with calculations based on a 2-D spatial model. The simulation results are supported by experiments.