  An insulating ferromagnetic (FM) phase exists in the quasi-one-dimensional
iron chalcogenide Ce$_2$O$_2$FeSe$_2$ but its origin is unknown. To understand
the FM mechanism, here a systematic investigation of this material is provided,
analyzing the competition between ferromagnetic and antiferromagnetic
tendencies and the interplay of hoppings, Coulomb interactions, Hund's
coupling, and crystal-field splittings. Our intuitive analysis based on
second-order perturbation theory shows that large entanglements between
doubly-occupied and half-filled orbitals play a key role in stabilizing the FM
order in Ce$_2$O$_2$FeSe$_2$. In addition, via many-body computational
techniques applied to a multi-orbital Hubbard model, the phase diagram confirms
the proposed FM mechanism, in agreement with experiments.
