The effect of interactions on the magnetic relaxation of nanocrystalline hexagonal barium hexaferrite BaFe10.4Co0.8Ti0.8O19 is discussed. We had previously shown that according to the T ln(t/τ0) scaling, an enhancement of the lowest-energy barriers was detected when demagnetizing interactions were dominant. Also, the Henkel plots obtained for particles of about 10 nm of mean diameter showed that the overall interactions were demagnetizing. In the present work, we have modified the interactions by milling the particles with a nanosized SiO2 powder. Dipolar interactions are modified by breaking the particle aggregates. The observed overall interactions resulted to be also demagnetizing for the milled sample. The time dependence of the magnetization was analyzed according to two different procedures: the fluctuation field and activation volume analysis and the T ln(t/τ0) scaling. Activation volumes were found to increase with demagnetizing interactions and the leading demagnetizing mechanism appeared to shift from an individual particle mode for the unmilled sample to a collective one for the milled sample. The second approach showed larger relaxation rates at short times for the milled sample. The effective energy barrier distribution obtained from the scaling suggested that demagnetizing interactions increased in the milled sample, which led to an enhancement of the amount of the lowest-energy barriers...