Counterfeits Vs. Proxies
People often use the terms "counterfeit" and "proxy" interchangeably. This causes some problems. There are also two different meanings of the term "proxy", which leads to additional confusion. I think the community would benefit from using these terms more consistently.
What is a counterfeit?
A counterfeit is any object that is intended to deceive someone into thinking it's something else.
In Magic, a counterfeit is any card that was not produced by Wizards of the Coast, yet is intended to be confused for a real card. It will usually look almost exactly the same to the untrained eye on both the front and the back. Counterfeiters expend significant effort trying to get their printing quality, cardstock, gloss, etc. to match that of real Magic cards.
Counterfeits get used for two primary purposes: defrauding players and vendors of their money by selling them fakes, and illegally entering tournaments without owning the real cards.
What is a proxy?
A proxy is any object that is a stand-in for something else. In Magic, this can refer to two different concepts.
Firstly, there are judge proxies. When a card gets damaged through the course of play in a tournament, judges are allowed to issue a proxy to replace it for the length of that tournament, so that the player is able to continue playing. These proxies are usually made with sharpie on a basic land. They are very obviously not the real thing.
Judge proxies can only be made in very limited circumstances. Players must get the approval of the head judge in order to have one in their deck, and they can't be used for reasons like "I don't own this card", "I spilled water on this card at home", "I don't want to risk damaging this card by shuffling it", etc. The only legal reasons to use such a proxy are to replace a card that got damaged while the tournament is in progress, to replace a card that came out of the pack damaged in a limited event, or to replace a warped foil that doesn't have any nonfoil printings. (Since it's unreasonable to penalize players for flaws in Wizards's own printing process.)
Secondly, there are player proxies. Player proxies are not legal to play in sanctioned events, but have other uses. Competitive players will often want to test out a deck to see if it's good before buying the cards, and proxies are useful for that. Casual players may want to use custom art on their cards, and mock up alternative graphics for a certain card on a computer and print it out. Or they may simply want to play casual Magic without having to pay for the most expensive items in their deck, or risk damaging them while shuffling.
Player proxies can look similar to judge proxies, being sharpie on some other card. They can also look a little more realistic, such as a printout of a card on a piece of paper, stuck in front of a real card in a sleeve. Or they may be printed out on actual cardstock, while still being obviously not real due to not having a traditional Magic back.
Wizards prefers the term "playtest card" for player proxies, trying to reserve the term "proxy" for only judge proxies. Their official communications about this topic use "proxy" to mean judge proxies and "playtest card" to mean player proxies. But this terminology has not caught on, so I thought it would be best to stick with "player proxy" and "judge proxy" for this article.
The "playtest card" terminology for player proxies also conflicts with how the collector community uses the term "playtest card", which is to refer to only the playtest cards printed by Wizards R&D/Studio X while in the process of designing new cards for future sets. These playtest cards only rarely make it out to the general public, so they have significant value. Normal player proxies do not have this collectability, since anyone can just make their own.
Ideally there would be some third term to remove all ambiguity, but language is a collective endeavor, and people already overwhelmingly use the term "proxy" for this concept, rendering it unlikely to change any time soon. "Proxy" is a normal English word that people are used to, whereas "playtest card" is a Magic-specific term that less enfranchised players won't be familiar with. Using "playtest card" will just lead to a bunch of people misunderstanding you, so ultimately I think "judge proxy" and "player proxy" are the best terms to try to standardize on.
Why does this matter?
The difference between the two types of proxy is important for understanding tournament policy, but I don't see it lead to much confusion or actual problems. I mention it here for completeness's sake. Much more important is the distinction between counterfeits and player proxies.
Counterfeits are bad. They're used to scam people out of thousands of dollars, to enter tournaments in violation of the rules, and are generally harmful to the community.
Proxies, on the other hand, are good. They allow people to have fun and to try things out without spending huge quantities of money. They allow players to play with their favorite pop culture references, or with cards they find aesthetically pleasing. There's sometimes a bit of disagreement between playgroups about how many proxies to allow in their casual games, but overall they're clearly beneficial to the community.
Counterfeiters and scammers know this, and attempt to lend themselves legitimacy by calling their counterfeits "proxies". Online sellers of counterfeits maintain plausible deniability by claiming that their cards are not intended to deceive anyone, even when everyone involved knows what's really going on.
This is all a complete sham of course. Pretty much everyone plays with sleeves nowadays, so the only reason to give your "proxy" a Magic back is if you're trying to fool someone into thinking it's real upon inspection. Even more so when the supposed "proxies" are advertised as "high quality" and "using the latest printing technology". But this strategy of intentionally confusing the terminology has been moderately successful in increasing the reach of counterfeits in the community.
Firstly, you have the honest players who want proxies to play in their casual decks, and want them to look nice. They usually don't own a printer capable of the requisite quality, so they go online to buy their proxies for a few dollars each. There's no reason they need a Magic-backed card, but it's more profitable to sell counterfeits than non-deceptive proxies, so most of the sellers online who claim to be selling proxies are actually selling counterfeits. The honest players unthinkingly buy these counterfeits, not realizing that they're giving money to an illegal business and hurting the community.
Secondly, you have the scammers who use "I just like proxies" as a defense for when their counterfeits are noticed. Perhaps they maintain a trade binder full of fake to rip off new players, and if someone notices they're fake, they suddenly switch to "oh yeah these aren't real, these are just proxies. *Gasp* How dare you accuse me of selling fakes." This makes it harder to kick these people out of LGSs and/or prosecute them, since they can claim everything was just a misunderstanding.
Thirdly, you have the people who use this as a motte-and-bailey to attempt to justify counterfeits. They make all the arguments I made above about why proxies are good for the community, then conclude with "and therefore it's ok for me to own/play/sell these proxies!" If you don't notice the sudden new meaning of the word "proxy", this can actually seem like a sound argument.
Most people who use the word "proxy" instead of "counterfeit" are not doing it to be malicious. They just use the word they're heard other people use without really thinking about it. But by doing so, they're unintentionally making it much easier for bad actors to scam inexperienced players and local stores out of their money.
Proxies are proxies. Counterfeits are counterfeits. Let's call things what they really are.