An IP address is a unique number given to every computer connected to a network that uses Internet Protocol for communication. The IP addresses are of two types IPV4 (32-bit) and IPV6 (128-bits). The expansion of the internet led to a shortage of IP addresses available under IPV4 and hence IPV6 was developed. Currently, both IPV4 and IPV6 are being used simultaneously. Note that IP addresses are allocated both on dynamic basis (where the IP address changes each time a machine/router is restarted) as well as fixed.
When a computer uses a proxy server to connect to the internet, the above tool shows the IP address of the proxy server. Note that an IP address can be used to geolocate a machine.