Density functional theory (DFT) calculations with local spin density discrimination have been performed to examine the effect of atomic under-coordination on the catalytic and magnetic properties of cuboctahedral (CO) and marks decahedral (MD) structured Pt and Rh nanoclusters. Consistency between theoretical calculations and experimental observations confirmed the predictions based on the framework of bond-order-length-strength (BOLS) correlation and nonbonding electron polarization (NEP) notations. The BOLS-NEP notation suggests that the shorter-and-stronger bonds between under-coordinated atoms induce local densification and quantum entrapment of core electrons, which then polarize the otherwise conducting electrons and result in shifts of the binding energy. Such strong localization resolves the intriguing catalytic and magnetic attributes of Pt and Rh nanoclusters.