Local and long-range structural properties, of sol-gel synthesized, Ce_1-xNi_xO₂ (0≤ x ≤ 0.1) nanopowders have been investigated. Substitution of Ce⁴⁺ by comparably smaller Ni²⁺/Ni³⁺ ions leads to decrement in lattice parameters. UVevisible spectra reveal decrease of bandgap with increase of disorder upon increasing Ni substitution. The photoluminescence (PL) spectra reveal five major peaks attributed to various defect states. Ni substitution results in the creation of oxygen vacancies (V_O) which further leads to conversion of considerable amount of Ce⁴⁺ ions to larger size Ce³⁺. These changes notably, modify the structure of the host lattice. The defects created along with the structural modifications bring, changes in the PL emission. The disorder in the lattice results in increase of non-radiative decay which reduces the PL emission. An increasing V_O and Ce³⁺ concentration at the surface acts as emission quenching centers. Lattice disorder and VO quantities were estimated using X-ray absorption (XAS), UVevis and Raman spectroscopy.