The prototypical phase change material GeTe shows an enigmatic phase transition at Tc ca. 650 K from rhombohedral (R3m) to cubic (Fm-3m) symmetry. While local probes see little change in bonding, in contrast, average structure probes imply a displacive transition. Here we use high energy X-ray scattering to develop a model consistent with both the local and average structure pictures. We detect a correlation length for domains of the R3m structure which shows power law decay upon heating. Unlike a classical soft mode, it saturates at ca. 20 {AA} above Tc. These nanoclusters are too small to be observed by standard diffraction techniques, yet contain the same local motif as the room temperature structure, explaining previous discrepancies. Finally, a careful analysis of the pair distribution functions implies that the 0.6 % negative thermal expansion (NTE) at the R3m -Fm-3m transition is associated with the loss of coherence between these domains.