Despite the order/disorder nature of its ferroelectric phase transition, and evidence for the evolution of local order as being important for understanding the transition, no comprehensive diffuse scattering study of the short-range order in triglycine sulphate, (TGS), (NH2CH2COOH)3H2SO4 has been undertaken. Diffuse scattering from single crystals is sensitive to two-body correlations, and can act as a probe of local structure, which in a second order phase transition acts as a precursor to the low temperature phase. The role of hydrogen bonding and dipolar interactions in the ferroelectric phase transition in TGS has been a long matter of conjecture. Using neutron and X-ray single crystal diffuse scattering this study shows that hydrogen bond mediated interactions between polarising glycine molecules cause local one-dimensional polarised domains to develop, oriented parallel to the b axis. These domains interact via dipolar interactions, and the three-dimensional ferroelectric order arises. This provides a real-space, interaction-based model for the phase transition in TGS, showing in detail how the local chemistry and physics give rise to the polarised state.