Water has a very high dielectric constant and this allows salts to dissolve in water with dissociation. The dielectric constant tells us how well the solvent is able to separate ions. Coordination of water molecules around the anion and the cation greatly reduces the ion-ion attraction in the salt.

What is the relationship between dielectric constant and polarity of a solvent?

The dielectric constant (symbol: ε) of a solvent is a measure of its polarity. The higher the dielectric constant of a solvent, the more polar it is. eg: The dipole moment of water is higher than that of methanol; water is more polar than methanol.

How does dielectric constant play an important role in the selection of a solvent?

The effect of the solvent is not only because of its acidity or basicity but also because of its dielectric constant and its ability to preferentially solvate and thus stabilize certain species in acid-base equilibria. A change in the solvating ability or dielectric constant can thus influence the acidity or basicity.