A detailed study on the effect of grain size of nanocrystalline Gd2Zr2O7 (GZO) ceramics on its electrical properties, particularly the ionic conductivity, is reported. The nanocrystalline GZO was prepared by chemical co-precipitation method. The GZO ceramic with different grain sizes from 5 to 55 nm was fabricated by sintering them at different temperatures varying from 800 to 1400 °C. Structural studies were performed by X-ray diffraction and Raman spectroscopy and found the cubic pyrochlore phase of GZO in all cases. Their crystallite size has been increased from 5 to 55 nm as well as the structural ordering has been increased with the increase in sintering temperature. The ac electrical impedance analysis showed a dramatic increase in ionic conductivity with increasing grain size. The ionic conductivity measured at 700 °C was 8.7 × 10−6, 12.5 × 10−6, 20.4 × 10−6 and 45.4 × 10−6 S cm−1 for respective grain sizes 5, 12, 25, and 55 nm of GZO ceramics. Increase in conductivity was correlated to the increase in grain size. The activation energy for grain conductivity was found to be 1.42 ± 0.01 eV for all GZO ceramics irrespective of their grain size. However, the activation energy of grain boundary and total conductivity had decreased with increasing grain size. The activation energy for total conductivity was obtained to be 1.5, 1.48, 1.46 and 1.42 eV for 5, 12, 25, and 55 nm GZO ceramics respectively. Further, the ac conductivity was found to obey the universal Jonscher's power law and the power exponent s was found to increase with the increase in temperature. It was also showed that the non-overlapping small polaron tunneling (NSPT) has been the best suited theoretical model to explain the conduction mechanism occurred in GZO ceramics. In addition, increase in co-operative dynamics of mobile ions with increase in grain size was found to favor the enhancement of conductivity.