The thermodynamic and electrical effects of residual carbon in glass-barium titanate composites were investigated. Thermodynamic arguments are made suggesting that new phases form through carbothermal reactions between carbon and titanate-based dielectrics. Experimentally, it was shown that the reduced dielectric separated by insulating glass in the grain boundaries gave rise to a dielectric relaxation at room temperature consistent with the Maxwell-Wagner model. The conductivity of the dielectric was calculated based on the relaxation frequencies, allowing an estimate of the local oxygen activity due to the presence of carbon. This activity was consistent with the equilibrium oxygen activity for carbon oxidation at the processing temperature, and eight orders of magnitude different from the oxygen activity in the furnace atmosphere.