Thermalization of electron and gas temperature in CO2 microwave plasma is unveiled with first Thomson scattering measurements. The results contradict the prevalent picture of an increasing electron temperature that causes discharge contraction. It is known that as pressure increases, the radial extension of the plasma reduces from ~7 mm diameter at 100 mbar to ~2 mm at 400 mbar. We find that, simultaneously, the initial non-equilibrium between ~2 eV electron and ~0.5 eV gas temperature reduces until thermalization occurs at 0.6 eV. 1D fluid modelling, with excellent agreement with measurements, demonstrates that associative ionization of radicals, a mechanism previously proposed for air plasma, causes the thermalization. In effect, heavy particle and heat transport and thermal chemistry govern electron dynamics, a conclusion that provides a basis for ab initio prediction of power concentration in plasma reactors.