I want to disable clicking on the background panel or frame while showing a dialogue. And I want the dialogue to appear on top of this panel or frame constantly until it is closed.

How can I do this?
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Make Dialog/JDialog modal by calling
dialog.setModal(true);. This will solve both issues of clicking background panel and remaining on top of panel.It seems like this method is obsolete so better you should use
dialog.setModalityType(Dialog.ModalityType type)