Let's start with the latter. The reason our locations are disclosed is because this is the way the internet was built and set up. IP (internet protocol) addresses are used to give every computer that is a part of the internet its own identity. If computers did not have an identification of some sort, they would not be able to interact on a network, especially not on the largest network in the world: the internet. Thus, IP addresses are necessary. A proxy does provide an IP address; however, it is an alternate IP that fools the internet into thinking your computer is in an alternate location somewhere else in the world.
IP addresses are generally generated by your internet service provider (ISP) such as AOL, Comcast, AT