Murunskite (K 2 FeCu 3 S 4 ) bridges the two known families of high‐temperature superconductors, cuprates and iron‐pnictides, structurally and electronically. Like these families, murunskite exhibits an antiferromagnetic (AF)‐like response with an ordered phase below 97 K. The magnetic iron atoms are randomly distributed over one‐quarter of the sites in two‐dimensional planes, while the remaining sites are occupied by non‐magnetic copper, evoking the notion of a high‐entropy magnetic alloy. This intriguing magnetic transition is studied by neutron, Mössbauer, and X‐ray photoelectron spectroscopy (XPS) measurements on single crystals. The AF order has a nearly commensurate quarterzone wave vector. In the paramagnetic state, Mössbauer spectroscopy identifies two iron sites, associated with Fe 3 + or Fe 2 + oxidation states as observed by XPS, which merge into a third site upon cooling, indicating an orbital transition. This cascade of local transitions transforms iron atoms from a fully orbitally and magnetically disordered state to a homogeneously ordered state in inverse space, while still being randomly distributed in real space. This finding challenges the traditional paradigm of magnetism in insulators, which relies on a direct connection between crystal structure and the location of magnetic moments.