  We have studied the electronic structure of Zn$_{0.9}$Fe$_{0.1}$O
nano-particles, which have been reported to show ferromagnetism at room
temperature, by x-ray photoemission spectroscopy (XPS), resonant photoemission
spectroscopy (RPES), x-ray absorption spectroscopy (XAS) and x-ray magnetic
circular dichroism (XMCD). From the experimental and cluster-model calculation
results, we find that Fe atoms are predominantly in the Fe$^{3+}$ ionic state
with mixture of a small amount of Fe$^{2+}$ and that Fe$^{3+}$ ions are
dominant in the surface region of the nano-particles. It is shown that the room
temperature ferromagnetism in the Zn$_{0.9}$Fe$_{0.1}$O nano-particles is
primarily originated from the antiferromagnetic coupling between unequal
amounts of Fe$^{3+}$ ions occupying two sets of nonequivalent positions in the
region of the XMCD probing depth of $\sim$ 2-3 nm.
