  We perform a detailed study of the electronic structure of Fe$_{1-x}$O at
moderate values of $x$. Our results evidence that the Fe vacancies introduce
significant local modifications of the structural, electronic and magnetic
features, that serve to explain the origin of the measured dependencies of the
physical properties on $x$. The final properties are determined by a complex
interplay of the charge demand from O, the magnetic interactions, and the
charge order at the Fe sublattice. Furthermore, polaronic distributions of
charge resembling those at magnetite, Fe$_3$O$_4$, emerge for the most stable
defect structures. This defines a unique scenario to understand the nature of
the short-range correlations in Fe$_3$O$_4$, and unveils their intimate
connection to the long-range charge order developed below the Verwey transition
temperature.
