For data transmission, IP addresses are required and even DNS uses IP addresses to route to the correct website. It means without the knowledge of correct and actual IP addresses it is not possible to identify the physical location of the network.
Proxy servers prevent external users who are unauthorized to access such IP addresses of the internal network. It makes the computer network virtually invisible to external users.
proxy server
Proxy Server also maintains the list of blacklisted websites so that the internal user is automatically prevented from getting easily infected by viruses, worms, etc.