MnFe(P,Ge) is a promising magnetocaloric material for potential refrigeration applications near room temperature. However, its relatively large hysteresis and large temperature/field range of two-phase [paramagnetic (PM) and ferromagnetic (FM)] coexistence displayed in the cyclic first order magnetic transition (FOMT) cause energy losses and reduce the energy conversion efficiency. In this work, we explore the underlying causes of phase coexistence, hysteresis and structural transformation based on determination of the Ge distribution in MnFeP1-xGex (0.10 < x < 0.50) materials. We find that all the samples crystallize in the Fe2P-type structure [P6[combining macron]2m (No. 189), Z = 3] and Ge displays a strong preference for the 2c site. First principles total energy calculations confirm this site preference of Ge, and Ge entering the 2c site changes the electronic structures and enhances the Fe and Mn 3d exchange splitting across the Fermi level as well as the FM exchange interactions, consequently leading to a linear increase in the transition temperature with increasing Ge content. Scanning electron microscopy and energy-dispersive spectroscopy reveal the inhomogeneous distribution of Ge in grains, which makes the grains with larger Ge content transform from the PM to the FM phase first when cooling and thus causes the phase coexistence. Maximum entropy method electron-densities show that weakening the coplanar Fe-P/Ge(2c) and Mn-P(1b) bonding strengths across the PM to FM phase transition can release some 3d-electrons to enhance the Fe-Mn FM exchange interaction and result in coupling between the magnetic and structural degrees of freedom. This provides first direct evidence for the dominant role of Fe-Mn exchange interaction in the ferromagnetic ordering and may provide a method to observe the exchange interaction. Diminishing the variances in covalent bonding strengths across the FOMT gives rise to an exponential decay in the heat hysteresis when increasing the Ge occupancy at the 2c site. To the best of our knowledge, this is the first time a relationship between the variances in covalent bonding strengths and hysteresis is proposed. This material thus provides an example of a FOMT and hysteresis driven by reversible weakening and strengthening of covalent bonds. Based on these, a strategy of designing better magnetocaloric materials is suggested.