The extensive experimental and computational search for multifunctional materials has resulted in the development of semiconductor and oxide systems, such as ( Ga, Mn) N, ( Zn, Cr) Te and HfO2, which exhibit surprisingly stable ferromagnetic signatures despite having a small or nominally zero concentration of magnetic elements. Here, we show that the ferromagnetism of ( Zn, Cr) Te, and the associated magnetooptical and magnetotransport functionalities, are dominated by the formation of Cr- rich ( Zn, Cr) Te metallic nanocrystals embedded in the Cr- poor ( Zn, Cr) Te matrix. Importantly, the formation of these nanocrystals can be controlled by manipulating the charge state of the Cr ions during the epitaxy. The findings provide insight into the origin of ferromagnetism in a broad range of semiconductors and oxides, and indicate possible functionalities of these composite systems. Furthermore, they demonstrate a bottom- up method for self- organized nanostructure fabrication that is applicable to any system in which the charge state of a constituent depends on the Fermi- level position in the host semiconductor.