Spin nematics break spin-rotational symmetry while maintaining time-reversal symmetry, analogous to liquid crystal nematics that break spatial rotational symmetry while maintaining translational symmetry. Although several candidate spin nematics have been proposed, the identification and characterization of such a state remain challenging because the spin-nematic order parameter does not couple directly to experimental probes. KFe_{0.8}Ag_{1.2}Te_{2} (K_{5}Fe_{4}Ag_{6}Te_{10}, KFAT) is a local-moment magnet consisting of well-separated 2×2 Fe clusters, and in its ground state the clusters order magnetically, breaking both spin-rotational and time-reversal symmetries. Using uniform magnetic susceptibility and neutron scattering measurements, we find a small strain induces sizable spin anisotropy in the paramagnetic state of KFAT, manifestly breaking spin-rotational symmetry while retaining time-reversal symmetry, resulting in a strain-induced spin-nematic state in which the 2×2 clusters act as the spin analog of molecules in a liquid crystal nematic. The strain-induced spin anisotropy in KFAT allows us to probe its nematic susceptibility, revealing a divergentlike increase upon cooling, indicating the ordered ground state is driven by a spin-orbital entangled nematic order parameter
