Choose a (preferably non sketchy) player to relay information through, this prevents mafia from knowing the source of said information, which would otherwise reveal role info and let mafia set traps. This is only done for information obtained through use of role powers, and not say, set investigation obtained from splitter.
It is also important to proxy when the given information won't reveal role info i.e. in case of planeswalker, as this helps to confuse mafia.
Pickpockets, set investigators, priests, roleblockers and the like should proxy. They should simply reveal the information they know, revealing as little else as possible. Proxied information is revealed with a codename, which you are free to choose, but your proxy will probably choose one if you don't.
Once a proxy is chosen, typically that same proxy is used throughout game until death. There is some talk of using two different proxies to protect some roles (priest I think), if doing so you should not let it be known that you are the source of the other proxied information.
One denotes that they are a proxy when they reveal the info. They will say something like "superman says {jamb,Maya} ->Luke gives Maya innocent". Basically all info is assumed to be proxied.
A proxy is expected to flip a coin to decide whether to post the proxy themselves or pass it on the proxy chain. I believe that typically mafia will just reveal without actually flipping a coin. If you are proxied to, you should use randomness to decide whether to post yourself or pass it along to someone else.
I think that pretty much covers it.
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