Dielectric—

A dielectric is a type of insulator which has a property of polarization.

Generally, insulators are formed by covalent bonding, so, these elements do not have free electrons to conduct electricity. But the insulators which are formed by the atoms having large electro negativity difference, the shared electrons are shifted to the atom towards the high electro negative element. So, a small dipole is formed in a molecule. 

When these insulators are placed without external electric field these dipoles are randomly arranged and net electric field become zero. Now, when this dielectric is placed in between the plates of capacitors, these dipole align themselves according to the external field and develop a new electric field (say E_p), which act in the opposite direction of external electric field and reduce the effect of external electric Field. This increases the value of capacitance.