The Fe-Ag granular metal solid samples with 10% and 30% weight iron have been successfully fabricated using a sol-gel method, which are characterized by X-ray diffraction and transmission electron micrography. The average diameters of iron particles are from about a few nanometres to a few tens of nanometres controlled by the reducing temperature. The evolution of magnetic properties and microstructure during heat treating are described in detail and explained by using the superparamagnetism, single domain and multi domain theories. The magnetic anisotropy of the Fe-Ag granular solid is studied by using the law of approach to saturation. It is found that the magnetic anisotropy constant is in the order of 105 J m-3 which is higher than the value of the bulk iron and increases with the increase of reducing temperature.