We report on the room temperature ferromagnetism in the Zn1-xNixO (x=0, 0.03 and 0.05) nanoparticles (NPs) synthesized by a ball milling technique. X-ray diffraction analysis confirms the single crystalline, wurtzite ZnO structure for the 3% Ni doped ZnO NPs for higher milling time. HRTEM lattice image and SAED pattern show that the doped NPs are single crystalline with a d-spacing of 2.47 angstrom corresponding to the (1 0 1) plane. Energy-dispersive X-ray spectroscopy and X-ray photoelectron spectroscopy confirm the presence of Ni ions inside the ZnO matrix with 2+ valance state. Room temperature magnetic measurements exhibit the hysteresis loop with saturation magnetization (M-s) of 1.6-2.56 (emu/g) and coercive field (H-e) of 260 Oe. Micro-Raman studies illustrate doping/disorder induced additional Raman modes at 547, 574 cm 61 in addition to 437 cm 61 peak of pure ZnO. Photoluminescence (PL) spectra and UV-vis absorption measurements demonstrate some modification in the band edge emission and absorption characteristics, respectively. PL spectra also show defect related strong visible emission, which is believed to play a significant role in the FM ordering. These observations highlight the effect of changing defect density on the observed ferromagnetic moment values for the as synthesized Zn(1-x)Ni(x)ONPs. Magnetic interaction is quantitatively analyzed and explained using a bound magnetic polaron model and expected to arise from the intrinsic exchange interaction of Ni ions and Ov, Zn-i defects. Systemic studies on the structural, magnetic, and optical properties reveal that both the nature of the defects as well as Ni2+ ions are significant ingredients behind attaining high moment as well as high ordering temperature in Ni doped ZnO NPs. (C) 2015 Elsevier B.V. All rights reserved.