Magic Keyboard malfunctioning with new Macbook Air

The spacebar on my Magic Keyboard seems to be activating a blue box to appear on whatever page I am using, in Chrome browser (particularly in Gmail and Google docs) but also in Keynote and other programs. Then the spacebar no longer works as a key and I need to hit "command + the space bar" to get it to work. It works again if I turn the keyboard on and off, or if I reload whatever I am working on.