I can't find much about him that would explain my grandfather's curious retort. First of all, which Pototzky was he talking about -- Gregor, Felix, S.S., or Andreas, all of whom were Counts? Also, the name can be spelled 'Pototzky' or 'Pototsky' or completely differently. He must have been important in his time as many tours of Russian republics feature tours of his palace/museum, but none of which address who he was or why he was important.
I decided to focus on Andreas Pototzky, the Austrian Governor of Galicia, because he had lived at about the right time. This Pototzky apparently was an aristocratic pole hated by the peasants (though he probably wasn't unique in that way). He only appears in a New York Times article of Sept. 28, 1915 when the fugitive wanted in Austria for his assassination applied for political asylum in the U.S. The only seeming relevance of this crime is that it was committed for largely the same reasons that Crown Prince Ferdinand of Hungary (aka Archduke Ferdinand of Austria) was later assassinated, which led to the start of the first World War.
It's possible, however, that my grandfather had been referring to an earlier Count Pototsky, "an eighteenth century Polish nobleman who allegedly converted to Judaism in Amsterdam and was burned at the stake."
The bottom line is: I have no idea what my grandfather meant. Anyone with insight is invited to weigh in.