THz time-domain spectroscopy (TDS) is a significant technique for material characterization as it seeks to determine the optical or dielectric constants in the T-ray regime. The precision of the constants is highly affected by the intricate THz-TDS process. Typically, a short-pulsed THz-TDS system is composed of several mechanical, optical, and electronic parts, each of which is limited in precision and therefore has an effect on the uncertainty of the achieved optical or dielectric constants. This paper analyses sources of uncertainty and models error propagation through the system.