Murunskite (K₂FeCu₃S₄) 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.