Well, in much the same way a proxy for voting in your next Chairman would work. Assuming you are eligible to vote, but on this particular day (that the elections are being held), you happen to be out of town. However, having anticipated this, you ask whether you can cast your vote by proxy. So, finding a person whom you trust, you secretly tell them your vote and they, on your behalf, vote for you in absentia.

The proxy server is just like this. Instead of your Web browser heading for the Internet when you type in an URL, the proxy intercepts the request and asks for the page on your behalf.

The reply comes back to you, but via the proxy and the proxy server stores the reply, just in case you (or anybody else in your organization asks for it again shortly).

Thus, if the proxy were doing this for every individual within the organization, it would quickly build up a cache of all these requests, serving the same pages in a much reduced time on future requests.