Before we discuss what a proxy list is and when to use it, let's discuss what the word 'proxy' implies in computer jargon. A proxy server is a computer that acts as an intermediately between a user's computer and the internet. When you as a user connect your computer to the internet, this is what happens. You might be using a WI-Fi modem to connect your computer to the internet. Your WI-Fi modem is connected to a server that is connected to the internet. Now the computer that connects you via your WI-Fi to the internet is a proxy server. It is acting as an intermediately to connect you to the internet.
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