A proxy war is a war that results when two powers use third parties as substitutes for fighting each other directly.
While powers have sometimes used whole governments as proxies, terrorist groups, mercenaries, or other third parties are more often employed. It is hoped that these groups can strike an opponent without leading to full-scale war.
Proxy wars have also been fought alongside full-scale conflicts.
It is almost impossible to have a pure proxy war, as the groups fighting for a certain nation usually have their own interests, which are often divergent from those of their patron.
A famous conflict which exhibits patterns of a proxy war was the Spanish Civil War. The conflict that started between the Second Spanish Republic and Francisco Franco's loyalist fascists soon involved Nazi Germany and Italy (on the fascist side) and the Soviet Union on the Spanish Republic's side. This war served as a useful proving ground for the great powers to test equipment and tactics that would later be employed in the Second World War.
Proxy wars were common in the Cold War, because the two nuclear-armed superpowers (the Union of Soviet Socialist Republics and the United States of America) did not wish to fight each other directly, since that would have run the risk of escalation to a nuclear war, at least according to the official versions on both sides (see Mutually assured destruction). Proxies were used in conflicts in Afghanistan, Angola, Korea, Vietnam, the Middle East, and many other countries.
The first proxy war in the Cold War was the Greek Civil War, in which the Western-allied Greek government was nearly overthrown by Communist rebels with limited direct aid from Soviet client states in Yugoslavia, Albania, and Bulgaria. The Greek Communists managed to seize most of Greece, but a strong government counterattack forced them back. The Western Allies eventually won, due largely to an ideological split between Stalin and Tito. Though previously allied to the rebels, Tito closed Yugoslavia's borders to ELAS partisans when, despite the nonexistence of Soviet aid to the rebels, Greek Communists sided with Stalin. Albania followed Tito's suit shortly thereafter. With no way to get aid, the rebellion collapsed.
Another example of a proxy war was East Germany's covert support for the Red Army Faction (RAF) which was active from 1968 and carried out a succession of terrorist attacks in West Germany during the 1970s and to a lesser extent in the 1980s. After German reunification in 1990, it was discovered that the RAF had received financial and logistic support from the Stasi, the security and intelligence organization of East Germany. It had also given several RAF terrorists shelter and new identities. It had not been in the interests of either the RAF or the East Germans to be seen as co-operating. The apologists for the RAF argued that they were striving for a true socialist society not the sort that existed in Eastern Europe. The East German government was involved in Ostpolitik, and it was not in its interest to be caught overtly aiding a terrorist organization operating in West Germany. For more details see the History of Germany since 1945.
In the Korean War the Soviet Union and the People's Republic of China aided the Communists in North Korea and China against the United Nations forces led by the United States. The Soviet Union did not enter the war directly, though it was allegedly reported that the Soviets had been sending over pilots to fly for the Communists in MiG 15 fighter jets. China, however, did enter the war directly and sent millions of its troops in 1950 preventing the U.N. coalition from defeating the communist government of the north.
In the Vietnam War the Soviet Union supplied North Vietnam and the Viet Minh with training, logistics and material but unlike the United States Armed Forces they fought the war through their proxies and did not enter the conflict directly.
During the Lebanese Civil War, Syria supported the Maronite Christian dominated Lebanese Front with arms and troops, while interestingly enough Syria's enemy Israel also supported the Lebanese Front by providing them with arms, tanks and money. The Soviet-aligned Palestine Liberation Organization (PLO) supported the leftist Lebanese National Movement (NLM).
Following Angola's independence from Portugal in 1975 (see the Angolan War of Independence) rival nationalist groups began to fight each other for control of the country. The largest and most powerful of these groups was the Marxist-Leninist, MPLA which received massive support from the Soviet Union and Eastern Bloc nations in the form of money, logistics and weapons. Later, after the government of Angola requested assistance, Cuba sent what would eventually amass to 40,000 members of the Cuban Armed Forces. The two primary right-wing insurgent groups were UNITA and the FNLA. UNITA The National Union for the Total Independence of Angola (Portuguese: União Nacional para a Independência Total de Angola) is the second-largest political party in Angola. An organization with Maoist roots that would eventually become conservative was originally supported by the People's Republic of China during the 1960s in its war against Portuguese rule. This was at a time when the Soviets and Chinese were supporting opposing forces elsewhere in an attempt to counter each others influence.
Following the end of the independence war the United States and South Africa become UNITA's prime backers, U.S. cooperation with the apartheid regime of South Africa in supporting UNITA became controversial. Angolan Civil War started in 1975 and continued until 2002.
In 1975 the South African Defence Force invaded Angola to support UNITA and prevent South West African rebels from establishing a base in Angola. SWAPO a left-wing organization dedicated to ending South Africa's rule over South West Africa (now Namibia) was fighting a guerrilla war against the South Africans with the support of Angola's new communist government. The Central Intelligence Agency, through strong cooperation with South Africa provided aid to both UNITA and the FNLA, however UNITA quickly became the main benefactor of American support. The FNLA on the other hand, despite a long history of support from the United States was primarily supported by the conservative dictator of Zaire, Mobutu Sese Seko.
In another former Portuguese colony, Mozambique following a very similar independence war against Portugal (see the Portuguese Colonial Wars) a communist rebel group known as FRELIMO seized power. The communist government of Mozambique supported the rebellion against the white minority led government of Rhodesia (now Zimbabwe). In response, the Rhodesian government organized and then funded an anti-communist rebel group called RENAMO (Mozambique National Resistance) beginning the Mozambican Civil War. After Rhodesia collapsed and became Zimbabwe in 1980, South Africa took over supporting RENAMO. In 1991 the South African government began reforms at ending apartheid and also ending its involvement in armed conflict elsewhere. Later that year both South African and Cuban troops withdrew from Angola and in 1992 RENAMO and the government of Mozambique signed a peace accord. UNITA continued to fight the elected government of Angola, eventually losing its support from all of its former allies (including the United States and South Africa).
The conflict between Israel and the Arab countries has been described as a proxy war, with Israel acting as a proxy for the United States and the Soviet Union's proxy being Egypt until they expelled the Soviets in 1972, and Syria thereafter. ,  According to Pennsylvania State University Distinguished Professor of Political Science Stephen J. Cimbala, this theater was the site of the greatest Cold War setback to America when, under the influence of anti-Israeli attitudes after the Yom Kippur War in 1973, American allies Saudi Arabia and Iran (under the shah) drifted from the American sphere of influence, leading to the 1973 oil crisis as well as the eventual Iranian Revolution in 1979. 
Since the end of the Cold War the largest war by proxy has been the Second Congo War in which the governments of the Democratic Republic of the Congo, Uganda and Rwanda all used (and are perhaps still using) third party armed irregular groups.
During recent years, South Asia has been heavily hit by proxy wars between various countries. It has also been speculated by some political and strategic analysts that South Asian countries are actually facing a proxy war involving Western powers.
In the 2006 Lebanon War the Hezbollah played a similar role to the one played by the Vietcong in the Vietnam War, in the sense that the militia group was funded and largely controlled by the Iranian government. The 33-day military conflict between the Israeli Defense Force and the Hezbollah militia is seen as a proxy war resulting from political tension between Israel and Iran. On 16 July, the Israeli Cabinet released a communiqué explaining that, although Israel had engaged in military operations within Lebanon, its war was not against the Lebanese government. The communiqué stated: "Israel is not fighting Lebanon but the terrorist element there, led by Nasrallah and his cohorts, who have made Lebanon a hostage and created Syrian- and Iranian-sponsored terrorist enclaves of murder." Following the war, Hezbollah leader, Hassan Nasralla, has admitted that Iran aided Hezbollah by sending money and weapons via Syria. 
Iran has been under intense international pressure to halt its uranium enrichment program. Iran claims that its nuclear program is for peaceful purposes only, but many countries, primarily the United States and Israel, believe that Iran's intentions for uranium enrichment are to obtain nuclear WMD.