We investigate the formation of magnetic domains in a magnetic trilayer patterned using ion beam bombardment. The system consists of a finite array of in-plane magnetized ferromagnetic Fe elements embedded into an antiferromagnetically coupled Fe∕Cr∕Fe trilayer. Varying the interelement distance, we observe by means of magnetic force microscopy an intriguing transition from individual to collective behavior of the array elements. Above a critical interelement spacing, strong interelement coupling effects are observed, leading to complex correlations between domain structure on individual elements. The mechanism driving these correlations is the formation of domain boundary walls between elements, contrary to the more commonly observed dipolar coupling effects in magnetic arrays fabricated using lithography. Below this critical spacing, the entire array behaves as a single magnetic entity, exhibiting a collective magnetic domain state. The experimental observations can be simulated numerically and explained using an analytical model. The model correctly predicts observed dependencies on interelement distances.