In this paper we propose a solution to an unsolved problem in solid state physics, namely, the nature and structure of the glass transition in amorphous materials. The development of dynamic percolating fractal structures near Tg is the main element of the Twinkling Fractal Theory (TFT) presented herein and the percolating fractal twinkles with a frequency spectrum F(w) ~ wdf-1 exp Delta E|/kT as solid and liquid clusters interchange with frequency ù. The Orbach vibrational density of states for a fractal is g(w) ~ wdf-1, where df = 4/3 and the temperature dependent activation energy behaves as Delta E ~ (T2 – Tg2). The key concept of the TFT derives from the Boltzmann population of excited states in the anharmonic intermolecular potential between atoms, coupled with percolating solid fractal structures near Tg. The twinkling fractal spectrum F(w) at Tg predicts that the spatio-temporal thermal fluctuation autocorrelation relaxation function C(t) behave as C(t) ~ t-1/3 (short times), C(t) ~ t-4/3 (long times) and C(t) ~ t-2 (w < wc), which were found to be in excellent agreement with published nanoscale dielectric AFM experiments on a glassy polymer near Tg. Using the Morse potential, the TFT predicts that Tg = 2Do/9k, where Do is the interatomic bonding energy ~ 2-5 kcal/mol and is comparable to the heat of fusion DeltaHf. Since anharmonicity controls both the thermal expansion coefficient CTEL, and Tg, the TFT uniquely predicts that CTEL*Tg = 0.03, which is found to be universal for a broad range of glassy materials from pyrex to polymers to glycerol. Below Tg, the glassy structure attains a frustrated non-equilibrium state by getting constrained on the fractal structure and the thermal expansion in the glass is reduced by the percolation threshold pc as CTEg = pcCTEL. The change in heat capacity DeltaCp = CpL - Cpg at Tg was found to be related to the change in dimensionality from Df to 3 in the Debye approximation as the ratio CpL/Cpg = 3/Df, where Df is the fractal dimension of the glass. The TFT describes the molecular weight dependence of Tg, the role of crosslinks on Tg, the Flory-Fox rule of mixtures and the WLF relation for the time-temperature shift factor aT., which are traditionally viewed in terms of Free-Volume theory. The TFT offers new insight into the behavior of nano-confined glassy materials and the dynamics of physical aging. It also predicts the relation between the melting point Tm and Tg as Tm/Tg = 1/[1-pc] = 2.