Sharepoint service applications and Proxy Usage - Purpose of each component

• Service
  This is the actual service, with its own engine, data storage, and infrastructure. It can be hosted on a specific server of the farm, or it can be a third-pary service. For example, this could be an external ERP, or it can be a software component that will be installed in the farm.

• Service Instance
  Represents a single instance of the service, running on a server of the farm. There can be multiple instances of a service running on multiple application servers. The service application architecture gives you the ability to provide services in a scalable, multi-server configuration, with a load balancer to dispatch requests to the servers.
• Service Application
  This is a logical layer that makes the back-end infrastructure available to the farm. Whenever you use a service application, you do not care about where and how it is exposed. You do not care about the number and location of the physical service instances. You simply access the service application as a logical service.
• Service Application Proxy
  This is the proxy that virtualizes the access to the service application. In general, it is used on front-end servers of the farm and allows accessing the service application transparently and independently from its actual location.
• Service Consumer
  This is a page, a Web Part, or whatever else that runs on a server of the farm, consuming a service application through its service application proxy.