This paper investigates the ferromagnetism in ZnO:Mn powders and presents our findings about the role played by the doping concentration and the structural defects towards the ferromagnetic signal. The narrow-size-distributed ZnO:Mn nanoparticles based powders with oxygen rich stoichiometery were synthesized by wet chemical method using zinc acetate dihydrate and manganese acetate tetrahydrate as precursors. A consistent increase in the lattice cell volume, estimated from x-ray diffraction spectra and the presence of Mn 2p3/2 peak at ∼640.9 eV, in x-ray photoelectron spectroscopic spectra, confirmed a successful incorporation of manganese in its Mn2+ oxidation state in ZnO host matrix. Extended deep level emission spectra in Mn doped ZnO powders exhibited the signatures of oxygen interstitials and zinc vacancies except for the sample with 5 at. % Mn doping. The nanocrystalline powders with 2 and 5 at. % Mn doping concentration were ferromagnetic at room temperature while the 10 at. % Mn doped sample exhibited paramagnetic behavior. The maximum saturation magnetization of 0.05 emu/g in the nanocrystalline powder with 5 at. % Mn doping having minimum defects validated the ferromagnetic signal to be due to strong p-d hybridization of Mn ions.