A proxy server is a node on the Internet that allows a user to obscure his IP and location from sites that he visits. The server establishes a secure connection and rebroadcasts packets so that they appear to originate with the proxy server and not the user's computer.
One common use of proxy technology is to get around region blocks on the Internet. For example, many media companies in the United States put their content online for American consumers, but block any requests from outside the United States. If a user in another country connects using a proxy server in America, the media site will register the traffic as domestic and allow the user to evade the block. Likewise, users in countries without a free press may use proxies to access Western news sources or share information worldwide. Proxy servers are also used for nefarious purposes, since they can be used to hide the IP addresses of those performing attacks across the Internet.
Proxy servers can be useful tools, but they can also be very dangerous to use. The owner of a proxy server may be able to snoop on any requests sent through the node, so any user connecting to personal data or sending usernames or passwords through a proxy server may inadvertently be handing that information over to a third party.