We report on an experimental and theoretical investigation of the microstructural and magnetic properties in nanocrystalline Pr2Co7-xFex compounds. The exchange interactions (Jij) and Curie temperature (TC) values were theoretically determined using mean field theory (MFT), and the results were found to be in excellent agreement with experimental data. The dependence of macroscopic and microscopic magnetic properties on the Fe content (x) was investigated, considering the model of random magnetic anisotropy. The saturation approach (SA) was utilized to analyze magnetization curves (M(H)), and various magnetic parameters, including random anisotropy fields (Ha) and local random anisotropy constant (K1), were studied. It was observed that these parameters increase with increasing Fe content up to x = 0.5 and then decreased for x > 0.5. Moreover, the coercivity (HC) was analyzed using the Herzer model by taking into account the grain size (D) and exchange correlation length (Rf). The experimental HC values were consistent with those derived from the random anisotropy model. Electronic structure calculations based on density functional theory (DFT) were performed to further understand the impact of Fe substitution and the improvements in magnetic performance. The collective findings provide valuable insights into the magnetic properties and behavior of nanocrystalline Ce2Ni7-type Pr2Co7-xFex compounds, aiding in the understanding and design of advanced magnetic materials.