This paper presents a decentralized control frame-work for lattice-based Modular Self-Reconfigurable Robots (MSRR) which utilizes a novel magnetic fiducial system to facilitate neighbor identification and to enable algorithms which promise scalable functionality for systems with many modules. In this system individual modules autonomously follow simple behaviors while periodically accepting input from a centralized controller. This system is demonstrated with three initial behaviors: (1) Path following: modules follow a three dimensional path based on magnetic fiducial tags embedded in their neighbors, (2) Line formation: modules transform from a 3D structure into a line following a partially decentralized control algorithm, and (3) Light gradient aggregation: the formation of a group of modules guided by a global stimulus (i.e. visible light). This paper provides details of the neighbor identification system, introduces the three behaviors and presents the results of physical experiments performed with a system of twelve 3D M-Block robotic modules.