Compositional tailoring enables fine tuning of thermoelectric (TE) transport parameters by synergistic modulation of electronic and vibrational properties. In the present work, aspects of compositionally tailored defects have been explored in ZrNiSn based Half-Heusler (HH) TE material, to achieve high thermoelectric performance and cost effectiveness in n-type Hf-free HH alloys. In off-stoichiometric Ni-rich ZrNi1+xSn alloys in low Ni-doping limit (x<0.1), excess Ni induces defects (Ni-Vacancy antisite + Interstitials), which tends to cause band structure modification. In addition, structural similarity of HH and full-Heusler (FH) compounds and formation energetics lead to intrinsic phase segregation of FH nano-scale precipitates that are coherently dispersed within the ZrNiSn HH matrix as nanoclusters. A consonance was achieved experimentally between these two competing mechanisms for optimal HH composition having both FH precipitates and Ni/Vacancy antisite defects in the HH matrix by elevating the sintering temperature up to the solubility limit range of the ZrNiSn system. Defect-mediated optimization of electrical and thermal transport via carrier concentration tuning, energy filtering, and possibly all scale-hierarchical architecture, resulted in a maximum ZT ~1.1 at 873K for the optimized ZrNi1.03Sn composition. Our findings highlight a realistic prospect of enhancing thermoelectric performance via compositional engineering approach for wide applications of thermoelectrics.