We report on the metalorganic chemical vapor deposition (MOCVD) of GaN:Fe and (Ga,Fe)N layers on c-sapphire substrates and their thorough characterization via high-resolution x-ray diffraction (HRXRD), transmission electron microscopy (TEM), spatially-resolved energy dispersive X-ray spectroscopy (EDS), secondary-ion mass spectroscopy (SIMS), photoluminescence (PL), Hall-effect, electron-paramagnetic resonance (EPR), and magnetometry employing a superconducting quantum interference device (SQUID). A combination of TEM and EDS reveals the presence of coherent nanocrystals presumably FexN with the composition and lattice parameter imposed by the host. From both TEM and SIMS studies, it is stated that the density of nanocrystals and, thus the Fe concentration increases towards the surface. In layers with iron content x<0.4% the presence of ferromagnetic signatures, such as magnetization hysteresis and spontaneous magnetization, have been detected. We link the presence of ferromagnetic signatures to the formation of Fe-rich nanocrystals, as evidenced by TEM and EDS studies. This interpretation is supported by magnetization measurements after cooling in- and without an external magnetic field, pointing to superparamagnetic properties of the system. It is argued that the high temperature ferromagnetic response due to spinodal decomposition into regions with small and large concentration of the magnetic component is a generic property of diluted magnetic semiconductors and diluted magnetic oxides showing high apparent Curie temperature.