Magnesium (Mg) and Niobium (Nb) co-doped BaTiO3 ceramics are prepared using a solid-state reaction method under an air atmosphere, and their crystal structures, microstructures, valence states and dielectric properties are studied. The ceramics adopt a cubic perovskite structure, and the lattice parameter increases with doping content owing to the larger ionic radii of dopants. The complex permittivity and electric modulus as a function of frequency and temperature are analyzed. Dielectric relaxations without colossal permittivity are observed. The relaxation processes are thermally activated and their variations with temperature are analyzed. The activation energy values for the relaxation processes are determined by the Arrhenius relationship and increase with doping content. By analyzing the electric modulus, the activation values for high-frequency relaxation are found to be associated with the electrical properties of grain, and the contribution of grain boundary could be neglected based on internal barrier layer capacitor (IBLC) model. The electron hopping between the different Ti valences, which is confirmed by X-ray photoelectron spectroscopy, is supposed to play an important role in high-frequency relaxation. The permittivity plateaus are related to the inhomogeneous structures of grain and grain boundary, and the low-frequency permittivity plateau is attributed to the space-charge polarization at grain boundaries. By comparing with Cu/Nb co-doped BaTiO3, the absence of colossal permittivity is ascribed to high resistivity of the samples. Charge density and migration as well as the insulating grain boundaries are critical for the formation of space charge and a high permittivity.