Understanding the mechanisms for nanoparticle nucleation and growth is crucial for the development of tailormade nanomaterials. Here, we use X-ray total scattering and Pair Distribution Function analysis to follow the formation and growth of niobium oxide nanoparticles. We study the solvothermal synthesis from niobium chloride in benzyl alcohol, and through investigations of the influence of reaction temperature, a formation pathway can be suggested. Upon dissolution of niobium chloride in benzyl alcohol, octahedral [NbCl6-xOx] complexes form through exchange of chloride ligands. Heating of the solution results in polymerization, where larger clusters built from multiple edge-sharing [NbCl6-xOx] octahedra assemble. This leads to the formation of a nucleation cluster with the ReO3 type structure, which grows to form nanoparticles of the Wadsley-Roth type H-Nb2O5 structure, which in the bulk phase usually only forms at high temperature. Upon further growth, structural defects appear, and the presence of shear-planes in the structure appears highly dependent on nanoparticle size.