The solution-cast method was used to synthesize magnesia (MgO) nanoparticles filled poly(vinyl alcohol) (PVA) and poly(vinyl pyrrolidone) (PVP) blend matrix (80/20 wt %) based polymeric nanocomposite (PNC) films (i.e., [PVA–PVP]–x wt % MgO; x = 0, 0.06, 0.3, 0.6, 3.1, and 6.25). Most of these PNC materials structures are amorphous, according to an X-ray diffraction investigation. The blend surface was smooth and homogeneous under SEM, confirming PVA and PVP compatibility. MgO loading, on the other hand, enhanced the surface roughness. According to optical investigations, the films transmittance, Urbach's energy, and energy bandgap decreased as the Mg+ 2 -ions increased. Tensile strength has also improved from 5.92 MPa to 10.65 MPa, while Young's modulus has enhanced from 51.16 to 166.4 MPa. From 100 Hz to 1 MHz, the dielectric and electrical spectra of these films were measured. Due to the nanoconfinement effect, it has been determined that the dispersion of MgO nanoparticles in the PVA–PVP blend matrix dramatically increases the dielectric permittivity. With increasing frequency, the dielectric permittivity of these PNC films decreases while the ac electrical conductivity increases. When the temperature of a PNC film is raised, a nonlinear rise in dielectric permittivity is seen, and the dc electrical conductivity of the film follows the Arrhenius law. The nonlinear I-V curves improve with increased Mg+ 2 ion concentration. The developed and engineered unique high-performance flexible nanocomposites in the field of advanced functional materials for usage in next-generation optoelectronic, gas sensors, and microelectronic devices were ascribed to the studied properties of the PNC films.