γ-Irradiation and synchrotron-radiation-based X-ray absorption fine-structure (XAFS) spectroscopy have been used to induce structure disorder through the interaction of γ-rays (200 kGy) with fabricated Mn-doped ZnO nanoparticles (NPs) and then to examine thoroughly the resultant structural change. The extracted electronic/fine XAFS structural parameters reflect a compositional and γ-irradiation co-dependence. The average crystal structure of samples prepared by the sol-gel method was investigated by X-ray diffraction (XRD). A detailed structural XRD data analysis was carried out by applying a Rietveld refinement using the MAUD program. XAFS spectra were collected at the Zn K-edge (9659 eV) in transmission mode and at the Mn K-edge (6539 eV) in fluorescence mode. Direct evidence of the solubility of Mn ions in the ZnO structure was demonstrated by fitting the extended-XAFS (EXAFS) signal. Near-edge XAFS (XANES) analysis provided the oxidation states of Zn and Mn ions through fingerprint XANES spectra of the sample along with those of standard compounds. Linear combination fitting showed that the most fit chemical forms of Zn and Mn in the samples are ZnO and MnO, respectively. The oxidation states of both Zn and Mn XAFS absorbers were confirmed from pre-edge fitting. The results of the magnetic measurements were explained in light of the average and electronic/local structural information obtained from XRD, XANES and EXAFS techniques. The magnetic properties of the samples translate into an induced change in the average crystal and electronic/local structures upon Mn concentration change and γ-irradiation. XRD confirmed the successful preparation of hexagonal Mn-doped ZnO NPs with a crystallite size in the range 33–41 nm. Both XRD and EXAFS analysis detected a minor amount of Mn3O4 as a secondary phase. XANES and EXAFS provided information exploring the outstanding potential of the utilized protocol for detecting precisely the presence of the secondary phase of Mn3O4, which changes with Mn content (x). Mean-square relative displacement (σ2) values extracted from the EXAFS fitting were found to grow for Zn–Zn/Mn paths demonstrating the substitution of Mn/Zn into Zn crystal sites. The EXAFS analysis explains the reasons behind the enhancement in the magnetic properties and shows that the Mn doping content at x = 0.05 produces the most local atomic disorder in ZnO NPs. There is a strong harmony among the XRD, XANES, EXAFS and magnetization behavior of the Mn-doped ZnO NPs. Maximum magnetization was acquired at an Mn content of 0.05. γ-Ray-irradiated Zn1–xMnxO NPs are recommended as optimized candidates for showing the diversity of the applications.