Dedicated servers are usually run on dedicated hardware located in a data center, providing more bandwidth and dedicated processing power. Dedicated servers are the preferred method of hosting a game server for practically all PC-based multiplayer games. Dedicated servers can be set up by obtaining the server files, editing the configuration and executing the server.
Massively multiplayer online games are all run on dedicated servers usually hosted by the software company that developed and owns the game title, as this allows them to control and update content. In many cases they are run on clustered servers to allow for huge environments and large player counts.
Listen servers are mostly used by individual players in a LAN party setting.
A proxy server that passes all requests and replies unmodified is usually called a gateway or sometimes tunneling proxy.
A proxy server can be placed in the user’s local computer or at specific key points between the user and the destination servers or the Internet.