Kinetics of nanogel formation by intramolecular recombination of radicals generated on a linear chain is studied by Monte Carlo simulation using cooperative motion algorithm (CMA) and pulse radiolysis of poly(ethylene oxide) in oxygen-free aqueous solutions. Simulations, in good agreement with experiments, show dispersive kinetics of the process. Simulations of simple model cases (fixed distance between radicals, formation of loops, radical transfer), which are difficult or impossible to investigate experimentally, broaden the understanding of the importance of elementary processes which contribute to kinetics of recombination of randomly distributed radicals on long chains. It is shown that the main factor determining the radical recombination is the distance between them along the chain which strongly favors nearest-neighbor reaction. Decay half-time is related to the average distance between the radicals, but the time dependence of the rate constant (dispersive kinetics) is governed by the number of radicals per chain and chain length and cannot be described by a simple formula in a broad time range. Formation of intramolecular covalent bonds in the recombination process (generation of loops) has no detectable influence on the radical decay kinetics, probably due to the simultaneous occurrence of two opposite phenomena: buildup of steric hindrance and reduction of distance between the radicals. The relationship between decay kinetics and chain relaxation processes is discussed.