A technique used to cache information on a Web server. It acts as an intermediary between a Web client and a Web server.
Basically, a proxy server holds the most commonly accessed and recently used content from the World Wide Web in order to provide quicker downloads for users and to increase server security. It is common for an ISP to use a proxy server, especially if it has a slow link to the Internet. Proxy servers are also constructs that allow direct Internet access from behind a firewall. They open a socket on the server and allow communication via that socket to the Internet.
For example, if your computer is inside a protected network and you want to browse the Web using Netscape, you will need to set up a proxy server on a firewall. The proxy server would be configured to allow requests from your computer, trying for port 80, to connect to port 1080 on the server; then all of your requests would be redirected to the proper place.
Slang usage of this term implies a catalyst. For example, "In our company, the Internet is a proxy for change, and people are looking to me to act as the change agent."