The idea of using a proxy is about protecting information. If you don't care about the fact that people know which websites you access than a proxy might not help you.
To give you an example, a while ago I wanted to find out who wrote a certain edit to a Wikipedia page. That edit wasn't made with a nickname so the IP address was public. By having access to the IP address I could see that the edit was made person who lives in the city in which a person I suspected to have written the edit lives.
I know a hacker who had a conversation with a journalist. When the journalist told the hacker that she visit his website he knew the time the journalist visited because the browser send enough information to the webserver to identify the company behind the web request.
If you are a huge company and some journalists wants to write a piece about your company than you have a huge interest in knowing which parts of your company the journalist cares about.
The journalist on the other hand wants to catch you off guard. If he thinks you are hiding some scandal he doesn't want you to have any information about the research process that the journalist used before the interview.
Let's say you are a business A and want to buy item X from company B. There are 5 vendors who all sell item X but company B is the only one that offer feature P. For most business feature P isn't very important. For business B it's very important so the representative of business A spend a lot of time looking at the way feature P is described on the corporate web site of company B.
If company B knows, that information can inform their negotiating position. They can ask for a higher price because they know that company A want Y and they are the only company with feature Y.
Companies care about what information other companies have about them and usage of proxies is a way to reduce information leakage.
On a more personal level, you might share a WLan with a neighbor and not want that neighbor to know that you look at porn websites. A proxy can help you.
If you get banned from a forum and try to register a proxy will make it harder to catch you in your attempt.
Those examples I gave don't require any access to the ISPs. If you are living in China but don't want that the Chinese government knows which websites you browse then a proxy provides you a useful tool. It allows you to circumvent the Chinese firewall and access all websites.
Even in Western countries there are websites that get censored and which you might access freely by accessing them from another country. Chilling Effects provides many examples. Noteworthy is that certain far-right political content can't be found on Google if you use a German IP address.
There were times when Australia censored parts of the political Wikileaks website.
Apart from censorship of political speech there also straight commerical censorship. While China didn't censored the video "Ai Weiwei does Gangnam Style" because of political reasons the GEMA pushed Youtube in Germany to censor it because Google doesn't have an agreement with the about the right to Gangnam Style.
For similar reasons a lot of Youtube content isn't usable with a German IP.
7People with static IPs could use it to vandalise wikipedia, for example... – None – 2013-12-24T16:10:13.713
11Two words: US Netflix – Jesse – 2013-12-24T19:15:39.467
2When you request a page, the server can see your IP address. You hide your IP from the world when you use a proxy - only the proxy server sees your IP, the rest of the world sees the proxy's IP – Pranav Hosangadi – 2013-12-24T19:26:06.627
Sockpuppets on Stack Overflow. Until he finds out that we catch them even with all the nice proxy trickery... ;) – ThiefMaster – 2013-12-24T19:40:01.057
3I don't think this question is opinion-based. It's not "should I use a proxy?", it's asking for benefits one could get by using one. It can be answered properly. – gronostaj – 2013-12-24T21:02:39.067
1You're just going to confuse yourself if you state your question like this. Proxy is a very generic abstract term. You will see people answering below about particular cases which are very different - anonymous proxies, caching proxies etc. IMHO the best way to think of a proxy is as of something intermediary between source and destination that solves a well defined task (see the note above about anonymity vs caching) and only then get to the pros and cons. Another helpful thing is to read about the abstract concept of Proxy Pattern in the Gang of Four book. – AnonymousLurker – 2013-12-24T23:44:55.153
1proxy is stupid (if you're using it to hide your identity), it can be easily detected, try accessing pandora from outside the US using a proxy, it won't work unless you have a super proxy more powerful than spiderman, VPN is way way better and some of them are free, like cyberhost or you could install it on your server, then you'd use openvpn – Lynob – 2013-12-25T16:36:21.470
1@Fischer: A VPN is a proxy, one that works at the transport or network layer, instead of the application layer. – Ben Voigt – 2013-12-26T15:34:28.590
It seems none of the answers here address the topic of reverse proxies. This may seem off-topic if you consider the context of the question to refer only to forward proxies; however, the distinction is useful for a deeper understanding of proxies in general. This post provides excellent clarification, as well as use cases for both forward and reverse proxies.
– Mack – 2013-12-27T00:01:28.760