Nanocrystalline powders of Zn(1-x)Co(x)O synthesized by the coprecipitation technique show anomalous anisotropic broadening for x>0.05. This peak broadening is shown to be not only due to a reduction in the particle size but also due to a significant strain contribution, as confirmed by Williamson-Hall analysis. The presence of grouped Co(2+) ions, revealing the presence of clusters of high spin Co(2+) with antiferromagnetically coupled spins, as indicated by magnetization studies, seems to be responsible for the strain.