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Answer:

A proxy server acts as a gateway between user and internet. It is an intermediary server separating end users from the websites they wish to browse.
The proxy servers provide verious levels of functionality, security and privacy as per policy.
The proxy server can be a program running on the same machine as the brower or it can be another machine in the network or UTM hardware.
The proxy server is basically a computer/UTM on the network with its own IP address that is known to user computer. When user send a web request, user request goes to the proxy server first and proxy server makes user web request on behalf of user, collects the response from the web server, and forwards user web page data to see the page in the browser.
The proxy server can block access to certain web pages on the basis of IP address as per required/defined policy.
The proxy server can change user IP address, so the web server doesn’t know exactly where user is in the world. It can encrypt user data, so user data is unreadable in transit.
It is also called as caching server, when user wants a page then the caching proxy server checks whether it has the requeted page in its cash and whether it is still current if so it delivers that page to user, otherwise it fetches the fresh page and delivers to user.

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