Virtual Private Network (VPN) :
VPN offers a connectivity to another network, and when connected your computer receives a new IP address from a VPN provider. Every traffic from your computer routes through the VPN network, so your true IP address assigned by your ISP is hidden.
Proxy :
There are thousands of free web proxy servers that you can use to hide your IP address and surf anonymously. Browsing through a proxy means that you are not accessing a website directly, but going through a intermediate "proxy" which relays the information back and forth between you and the destination website.
So VPN and Proxy hides the ip address.
