We present a systematic investigation of the impact of co-doping Co and Mn on the morphology, structure, local structure, and magnetism of In2O3 via experimental methods and density functional theory (DFT) to divulge the magnetic generation mechanism leading to the realized ferromagnetism at 300 K. Single-phase Co, Mn:In2O3 with the cubic shape of regular size with control on dopant concentration and shape were synthesized by hydrothermal-annealing scheme. The high-resolution transmission electron microscope (HRTEM) results demonstrated the cubic morphology with regular size and average edge length of 26–36 nm. X-ray absorption near edge structure (XANES) and DFT flourished the valence state of Co and Mn predominantly as 2+ and 3+ within the host lattice. Magnetic measurements of In1.96Co0.02Mn0.02O3, In1.94Co0.02Mn0.04O3, and In1.92Co0.02Mn0.06O3 samples exhibited room temperature ferromagnetism (RTFM) with higher saturation magnetization. DFT investigations corroborated that the observed changes in magnetic ordering and decrease in the magnetic moment at higher Mn doping were associated with the turn from the ferrimagnetic system of single impurities with large magnetic moments to the ferromagnetic system of ferrimagnetic clusters with smaller total magnetic moments. These findings provide deep insight into the fundamental understanding of the dopant-activated magnetism and local structure of In2O3-based nanostructures. © 2023 Elsevier Ltd.