X-Ray magnetic circular dichroism (XMCD) experiments on diluted magnetic semiconductor nanocrystals (2-7 nm) are reported in order to study their local electronic structure and magnetic properties. ZnSe nanoparticles containing either single manganese ions (Mn2+) distributed in the lattice of the entire particle or a MnSe core in the center are prepared using high temperature approaches. The Mn2+ concentration is varied between less than one to several tens of manganese ions per nanocrystal. For all samples it is shown that the Mn2+ is exclusively present in the bulk of ZnSe nanoparticles with no evidence for oxidation to higher Mn-oxidation states. The magnetic ions are highly polarized inside the nanocrystals reaching about 80% of the theoretical value of a pure d(5) state under identical conditions for the case of isolated manganese ions. Nanocrystals with a MnSe core ZnSe shell structure reach <50% of this value. Thus, their polarization is significantly more hindered, which is due to the significantly enhanced Mn-Mn interactions and a more distorted crystalline lattice. in contrast, no coupling between the manganese centers is observed in the nanoparticles doped samples with low concentrations of Mn2+, indicating that these ions are isolated in the bulk of the nanoparticles.