A proxy server means a substitute server. This is to hide your identity from cyberspace or Internet world.
Mark is right but let me elaborate just a little. Think of a proxy server as a gateway that all of your internet activity goes through. This makes it look like the proxy is doing everything you are, and you are only connecting to the proxy. Proxy servers can also be used as a filter. Most schools and large businesses filter their internet through a proxy to weed out adult material and "time wasting" sites such as Facebook or AddictingGames. Proxy servers have become big in the online piracy environment because it is on more layer of protection between the person downloading the illegal content and the person trying to catch them doing so. Trouble is, someone who is good at their job can trace back through 2-3 proxy servers with little effort.
Thanks for this elaboration. I understand it now more clearly.
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