Definition: The word proxy, as it relates to information security, means concealing the identity and maintaining the anonymity of an Internet user, computer, server or network. A proxy is a substitute. A user first accesses a node on a network and contacts a server that has the capability to provide the desired level of functionality (e.g. surfing on the web) for users. The proxy is a “server-in-between” and it would conceal the identity of your IP. Your computer that made the original request remains.
Its Relevance: You or your organization could avoid concealing the address of your computer(s). Doing so might enhance the confidentiality, integrity and availability of information resources you want to protect.