A firewall prohibits Internet traffic from accessing your local area network through your Internet connection. It does this by restricting IP addresses that can access your internal network from the Internet - very much like a packet filter. A firewall as well as the proxy server, can limit which ports can be used, by whom and when. In addition, it will track and log all the information that transverses the firewall. This log can be analyzed from both a usage perspective as well as a security perspective.
Proxy servers offer functions similar to a firewall, but are built to be application specific.
They then can be used to filter unwanted connections or pages. A special type of proxy server is the caching proxy server. Installation of a caching proxy server can save bandwidth, because any Web page that is retrieved by a user remains on the proxy server. This allows others who may want that page to get the local copy. Packet filtering, firewalls and proxy servers need to be installed and implemented by professionals who are skilled in using them.