In this work, we present an experimental and theoretical study of structural and magnetic properties of Fe doped rutile TiO₂ nanopowders. We show that Fe-doping induces the formation of oxygen vacancies in the first-sphere coordination of iron ions, which are in +2 and +3 oxidation states. We found that Fe ions form dimers that share one oxygen vacancy in the case of Fe³⁺ and two oxygen vacancies in the case of Fe²⁺. The saturation magnetization is almost independent of iron concentration and slightly increases with the relative fraction of Fe²⁺. Ab initio calculations show that two Fe ions sharing an oxygen vacancy are coupled ferromagnetically, forming a bound magnetic polaron (BMP), but two neighbor BMPs are aligned antiparallel to each other. Extra electron doping plays a fundamental role mediating the magnetic coupling between the ferromagnetic entities: carriers, possibly concentrated at grain boundaries, mediate between the BMP to produce ferromagnetic alignment.