In order to develop a microscopic level understanding of the anomalous dielectric properties of nanoconfined water (NCW), we study and compare three different systems, namely, (i) NCW between parallel graphene sheets (NCW–GSs), (ii) NCW inside graphene covered nanosphere (NCW–Sph), and (iii) a collection of one- and two-dimensional constrained Ising spins with fixed orientations at the termini. We evaluate the dielectric constant and study the scaling of ε with size by using linear response theory and computer simulations. We find that the perpendicular component remains anomalously low at smaller inter-plate separations (d) over a relatively wide range of d. For NCW–Sph, we could evaluate the dielectric constant exactly and again find a low value and a slow convergence to the bulk. To obtain a measure of surface influence into the bulk, we introduce and calculate correlation lengths to find values of ∼9 nm for NCW–GS and ∼5 nm for NCW–Sph, which are surprisingly large, especially for water. We discover that the dipole moment autocorrelations exhibit an unexpected ultrafast decay. We observe the presence of a ubiquitous frequency of ∼1000 cm−1, associated only with the perpendicular component for NCW–GS. This (caging) frequency seems to play a pivotal role in controlling both static and dynamic dielectric responses in the perpendicular direction. It disappears with an increase in d in a manner that corroborates with the estimated correlation length. A similar observation is obtained for NCW–Sph. Interestingly, one- and two-dimensional Ising model systems that follow Glauber spin-flip dynamics reproduce the general characteristics.