Speaking of computer networks, a proxy server is a server, an application or a computer system that can function as a intermediary for processing requests registered by clients who are might be looking for resources from other servers. For example, a client hitches on to this kind of a server with a request for some specific service such as a web page, a connection or a file or may be some other resources that are available from another server. The server then examines the request as a means of simplifying and controlling complexities. These proxies were brought in for adding structure as well as encapsulation to the distributed systems. Currently, a majority of these proxies are nothing but web based proxies that facilitate access to the content embedded on the World Wide Web and provides and supports anonymity.
A proxy server can be of various types. You have a tunneling proxy for passing messages and requests. They work more like gateways. A forward proxy is one that faces the internet and is used for retrieving information from the World Wide Web. You also have a reverse proxy that protects the access to a server. It performs functions like load balancing, caching and authentication and so on.