Molecular dynamics simulations are used to model proteins that diffuse to DNA, bind, and dissociate; in the absence of any explicit interaction between proteins, or between templates, binding spontaneously induces local DNA compaction and protein aggregation. Small bivalent proteins form into rows [as on binding of the bacterial histone-like nucleoid-structuring protein (H-NS)], large proteins into quasi-spherical aggregates (as on nanoparticle binding), and cylinders with eight binding sites (representing octameric nucleosomal cores) into irregularly folded clusters (like those seen in nucleosomal strings). Binding of RNA polymerase II and a transcription factor (NFκB) to the appropriate sites on four human chromosomes generates protein clusters analogous to transcription factories, multiscale loops, and intrachromosomal contacts that mimic those found in vivo. We suggest that this emergent behavior of clustering is driven by an entropic bridging-induced attraction that minimizes bending and looping penalties in the template.