This thesis is mainly devoted to the study of nanoscale inhomogeneities in diluted and disordered magnetic systems. The presence of inhomogeneities was detected experimentally in several disordered systems which in turn gave rise to various interesting and unexpected properties. In particular, the possibility of room-temperature ferromagnetism generated a huge thrust in these inhomogeneous materials for potential spintronics applications. However, a proper theoretical understanding of the underlying physics was a longstanding debate. In this manuscript we provide a detailed theoretical account of the effects of these nanoscale inhomogeneities on the magnetic properties of diluted systems. First we show the importance of disorder effects in these systems, and the need to treat them in an appropriate manner. The self-consistent local RPA (SC-LRPA) theory, based on finite temperature Green's function, is found to be the most reliable and accurate tool for this. We have successfully implemented the SC-LRPA to study the dynamical magnetic properties of the 3D nearest-neighbor diluted Heisenberg model. The percolation threshold is found to be reproduced exactly in comparison with previous existing studies. Following this, we discuss the essential role of a minimal model approach to study diluted magnetic systems. The one-band V-J model, has been used to calculate the Curie temperature and the spin excitation spectrum in (Ga,Mn)As. An excellent agreement is obtained with first principles based calculations as well as experiments. Finally we propose an innovative path to room-temperature ferromagnetism in these materials, by nanoscale cluster inclusion. We find a colossal increase in T_C of up to 1600% compared to the homogeneous case in certain cases. Also the spontaneous magnetization is found to exhibit anomalous non-mean-field like behavior in the presence of inhomogeneities. In addition we observe a complex nature of the magnon excitation spectrum with prominent features appearing at high energies, which is drastically different from the homogeneous case. Our study interestingly reveals a strong suppression of the spin-stiffness in these inhomogeneous systems. The results indicate toward the strong complexities associated with the interplay/competition between several typical length scales. We believe this work would strongly motivate detailed experimental as well as theoretical studies in this direction in the near future.
