We investigate the local electronic structure and magnetic properties of the group-IV-based ferromagnetic semiconductor, Ge(1-x)Fex (GeFe), using soft X-ray magnetic circular dichroism. Our results show that the doped Fe 3d electrons are strongly hybridized with the Ge 4p states, and have a large orbital magnetic moment relative to the spin magnetic moment; i.e., morb/mspin ≈ 0.1. We find that nanoscale local ferromagnetic regions, which are formed through ferromagnetic exchange interactions in the high-Fe-content regions of the GeFe films, exist even at room temperature, well above the Curie temperature of 20-100 K. We observe the intriguing nanoscale expansion of the local ferromagnetic regions with decreasing temperature, followed by a transition of the entire film into a ferromagnetic state at the Curie temperature.