We have utilized a comprehensive set of experimental techniques such as transmission electron microscopy (TEM) and synchrotron-based x-ray absorption spectroscopy (XAS) and the respective x-ray linear dichroism and x-ray magnetic circular dichroism to characterize the correlation of structural, chemical and magnetic properties of Co-doped ZnO samples. It can be established on a quantitative basis that the superparamagnetic (SPM) behavior observed by integral superconducting quantum interference device magnetometry is not an intrinsic property of the material but stems from precipitations of metallic Co. Their presence is revealed by TEM as well as XAS. Annealing procedures for these SPM samples were also studied, and the observed changes in the magnetic properties found to be due to a chemical reduction or oxidation of the metallic Co species.