  We report infrared and Raman spectroscopy results of the spin-1/2 quantum
magnet TiOCl. Giant anomalies are found in the temperature dependence of the
phonon spectrum, which hint to unusual coupling of the electronic degrees of
freedom to the lattice. These anomalies develop over a broad temperature
interval, suggesting the presence of an extended fluctuation regime. This
defines a pseudo-gap phase, characterized by a local spin-gap. Below 100 K a
dimensionality cross-over leads to a dimerized ground state with a global
spin-gap of about 2$\Delta_{spin}\approx$~430 K.
