The most common and popular way to stay on internet nameless is proxy server. To accept incoming request of web and forward it to destination are done by the proxy server machine; these severs acts like a middle men of internet which assist to distinguish your computer and destination server. Each computer get connected to net through proxy server or it is a computer that offers online as well as offline services to permit other system users to use web world. So proxy server serve the role of agent between the client (users computer) and server.
Please dont mix up the concept of a proxy server with a NAT (Network Address Translation). Although they look alike, a proxy server does the work of connection, response, and receives traffic from the Internet. In other words, it acts in support of the client computer. A NAT, on the other side, it changes the original address of traffic coming through it and passes it to the Internet. The computer after the NAT, not the NAT itself, does the work.
Technically the difference between proxy server and NAT is as proxy server use transport level 4 or higher, but NAT using 3rd level.
How It Works:
1.When a user on intranet requested for any web page. Actually it requests to proxy server, which forward it to destination server. It also receive data from net server before the client pc, and it transmits the data to user.
2.Proxy servers maintain log report of total network usage such as download, IP address of accessed websites, date & time of access, URL. E.g. Telnet proxy server can trace each and every data passing through.
3.Some proxy servers have to work with unique users. Many people use Netscape with proxy servers. When such type of software is used, that software must be configured to use it with proxy server. Then only intranet users allow using client software as usual.
4.Proxy server not only work as relay but also it can make secured network in office, home. E.g. a FTP proxy server can configured to restrict any type of miss use, means ban download or upload or both.
5.Proxy server also served as time saver. It keeps the copies of web pages .So when user request for same, proxy server provide that page without contacting to internet server. It save time when time is main factor of work.