Iron-oxide nanoparticles have been synthesized by high temperature arc plasma route with different plasma currents and characterized for their structure, morphology and local atomic order. Fe K-edge x-ray absorption spectra reveal distinct local structure of the samples grown with different plasma currents. We have shown that the local disorder is higher for the higher plasma current grown samples that also have a larger average particle-size. The results provide useful information to control structural and morphological properties of nanoparticles grown by high temperature plasma synthesis process.