This review summarizes the state-of-the-art in the search for room temperature ferromagnetic semiconductors based on transition-metal-and rare-earth-doped nitrides. The major methods of synthesis are reported, together with an overview of the magnetic, structural, electrical and optical characterization of the materials systems, where available. The controversial experimental results concerning the actual value of the apparent Curie temperature in magnetically doped nitrides are highlighted, the inadequacy of standard characterization methods alone and the necessity of a possibly exhaustive structural investigation of the systems are proven and underlined. Furthermore, the dependence on the fabrication parameters of the magnetic ions incorporation into the semiconductor matrix is discussed, with special attention to the fundamental concepts of solubility limit and spinodal decomposition. It is argued that high-temperature ferromagnetic features in magnetically doped nitrides result from the presence of nanoscale regions containing a high concentration of the magnetic constituents. Various functionalities of these multicomponent systems are listed. Moreover, we give an extensive overview on the properties of single magnetic-impurity states in the nitride host. The understanding of this limit is crucial when considering the most recent suggestions for the control of the magnetic ion distribution-and consequently of the magnetic response-through the Fermi level engineering as well as to indicate roads for achieving high-temperature ferromagnetism in the systems containing a uniform distribution of magnetic ions.