The term has a complex origin and originally meant something very different. It derives from the Greek proskenion, meaning "in front of the scene". The scene was a building with doors that served as the backdrop in Ancient Greek theater. The proskenion was a raised stage in front of the scene which appeared in the Hellenistic era and in Roman theater; it served simply to make the actors higher to aid visibility, and to separate them from the chorus. Ancient theaters thus lacked the modern proscenium arch. It was also absent from Renaissance theaters.
The proscenium arch developed in seventeenth century theaters, alongside the development of illusionist scenery. This design has been the most common for theater spaces in the 18th, 19th, and 20th centuries in Western theater.
The proscenium arch creates a "window" around the scenery and actors. The advantages are that it gives everyone in the audience a good view because the actors need only focus on one direction rather than continually moving around the stage to give a good view from all sides. A proscenium theater layout also simplifies the hiding and obscuring of objects from the audience's view (sets, actors not currently performing, and theater technology). Anything that is not meant to be seen is simply placed outside the "window" created by the proscenium arch.
The side of the stage that faces the audience is referred to as the "fourth wall". The phrase "breaking the proscenium" refers to when the actor addresses the audience directly as part of the dramatic production (is also known as breaking the fourth wall). The phrase can also refer to when a member of the cast or crew walks onto the stage or into the house when there is an audience inside, also breaking the fourth wall.
Proscenium theatres have fallen out of favor in some theater circles because they perpetuate the fourth wall concept. The staging in proscenium theatres often implies that the characters performing on stage are doing so in a four-walled environment, with the "wall" facing the audience being invisible. Many modern theatres attempt to do away with the fourth wall concept and so are instead designed with a thrust stage that projects out of the proscenium arch and "reaches" into the audience (technically, this can still be referred to as a proscenium theater because it still contains a proscenium arch, however the term thrust stage is more specific and more widely used).