A consistent extension of Onsager's reaction field model to nonlinear-optical experiments in condensed media is presented. This model is used to derive effective (nonresonant) linear and nonlinear molecular polarizabilities involved in refractive index measurements, electric-field induced second-harmonic generation, hyper-Rayleigh scattering, third-harmonic generation and degenerate four-wave mixing. The commonly applied Lorentz correction, while being a useful approximation in linear optics, is demonstrated to lead to systematic errors of typically 20% in nonlinear optical experiments. This is due to an inherent inconsistency that originates from the implicit assumption of a cavity held factor for the nonlinear molecular response.