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Polymer nanocomposites are defined as polymers in which small amounts of nanometer size fillers are homogeneously dispersed by only several weight percentages. Addition of just a few weight percent of the nanofillers has profound impact on the physical, chemical, mechanical and electrical properties of polymers. Such change is often favorable for engineering purpose. This nanocomposite technology has emerged from the field of engineering plastics, and potentially expanded its application to structural materials, coatings, and packaging to medical/biomedical products, and electronic and photonic devices. Recently these 'hi-tech' materials with excellent properties have begun to attract research people in the field of dielectrics and electrical insulation. Since new properties are brought about from the interactions of nanofillers with polymer matrices, mesoscopic properties are expected to come out, which would be interesting to both scientists and engineers. Improved characteristics are. expected as dielectrics and electrical insulation. Several interesting results to indicate the foreseeable future have been revealed, some of which are described on materials and processing in the paper together with basic concepts and future direction.