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Definition
A proxy most often refers to the specific placement of a building or structure that isn't inside a main base, often positioned close to the enemy or out in the open. The nearness of proxy buildings to the enemy reduces traveling time for units, making it easier to mass units outside your opponent's base for an early attack.
Uses
Each of the three races in "StarCraft II" can use a variety of proxy strategies. For example, a Terran player can build a barracks or factory near the opponent's base; the units that are trained no longer have to cross the entire map, so it's easier to supply reinforcements. Protoss players can build a pylon, allowing them to warp in units wherever the pylon's power field reaches. Zerg players can build an entire hatchery closer to their opponent, giving them access to creep spread, larva to build units and the Queen's Transfuse ability.
Drawbacks
Using a proxy strategy is risky because it involves sending your worker unit out near the enemy's base. If your worker unit is spotted, it can be destroyed, and you will have to fall back. Proxy strategies rely on not being seen until it's too late; if your proxy building is destroyed, your unit production stops, and until it is finished, your reinforcements have to travel a long way across the map. If the strategy is foiled, it may put you far behind your opponent.
Defense
The best way to prevent a proxy attack is to make sure to scout the areas inside and outside your base at all times. Send a worker to patrol around your base and its borders to look for any suspicious activity. If you see enemies attempting to build anything, kill the worker first. By the time a replacement worker gets there, it may be too late for the enemies' proxy tactic to work. For late-game proxies, scout hidden corners of the map when you can to look for hidden buildings; your enemies may try to hide their teching strategy from you by hiding important buildings outside their base where they don't expect you to look.