What is a proxy server, and why does it stop me from connecting online?

See this article https://support.apple.com/en-in/guide/mac-help/enter-proxy-server-settings-on-mac-mchlp2591/mac

A proxy server is basically an intermediary web server. For example, when you send an http request -- such as trying to connect to a particular website -- instead of the request going directly to the server where that web page is located, your request will pass through a proxy server first, which will evaluate your request, and then act accordingly. It acts as a buffer, and offers a degree of protection as well.

By default, none of the proxy server settings on your computer should be enabled. If they are, then you must have either installed some app, or subscribed to some proxy service, which enabled those specific settings. This could have also resulted from some questionable app surreptitiously enabling those settings without your knowledge or permission. Be careful.

Question: Are you connected directly to the Internet, or do you connect, perhaps, via a company network, school or university network, etc.? This might explain the proxy settings as well.

Being as you have the actual host name of the proxy server hidden in the above image, it is difficult to definitively say whether or not it is related to your university. If you recognize the name, then in all likelihood it probably is related to your university, and is nothing to worry about.

To answer your question, no, distance from the actual proxy server has nothing to do with it. As long as you have the proxy server host enabled in your settings, then your computer will continue to use it. Being as you are not making direct connections to whatever websites you are trying to visit, but rather, are tunneling through the proxy server, yes, some degree of lag should be expected.

At this point, I think you need to contact the IT folks at your university and ask them directly if those settings are related to the university, if you still have doubts about it.

If you don't like the lag, then simply disable the proxy server by unchecking the two boxes on the left side of the window.

I doubt that any of this has to do with malware.

Schools like to use "proxy servers" to protect the kiddies from inappropriate sites. The proxy servers will filler out bad sites.

R