The domain configuration contributions to the direct-current (DC) bias characteristics of nanograined BaTiO3 were clarified. Domain boundaries became more ambiguous with decreasing grain size (g.s.), whereas domain patterns partially vanished because of the reduction in BT ferroelectricity, in the g.s. range < 1 μm. Additionally, intergranular stress increased with decreasing g.s., resulting in crystal lattice hardening in the vicinity of the domain walls (DWs) and suppression of dipole fluctuations in the DWs. These domain structural variations with the domain size (d.s.) reduced permittivity in the absence of a DC electric field, resulting in improvements in permittivity depressions in an electric field (Δε). Magnesium substitution slightly decreased the d.s. The increase in DW density upon Mg loading implied defect pairs, which acted as new DW pinning centers, thereby subdividing the DWs. The Δε notably improved via Mg loading, because a defect pair effectively pins the DWs under the electric field.