Using first-principles plane wave calculations we predict that electronic and magnetic properties of graphene nanoribbons can be affected by defect-induced itinerant states. The band gaps of armchair nanoribbons can be modified by hydrogen saturated holes. Defects due to periodically repeating vacancy or divacancies induce metallization, as well as magnetization in non-magnetic semiconducting nanoribbons due to the spin-polarization of local defect states. Antiferromagnetic ground state of semiconducting zigzag ribbons can change to ferrimagnetic state upon creation of vacancy defects, which reconstruct and interact with edge states. Even more remarkable is that all these effects of vacancy defects are found to depend on their geometry and position relative to edges. It is shown that these effects can, in fact, be realized without really creating defects.