Transparent proxy is most often used incorrectly to mean “intercepting proxy” (because the client does not need to configure a proxy and you can not directly detect that its requests are being proxy). Transparent proxies can be implemented using Cisco’s WCCP (Web Cache Control Protocol). This protocol owner resides in the router and is configured from the cache, allowing the cache to determine what ports and traffic is sent via transparent redirection from the router. This redirection can occur in one of two ways: GRE tunnel rewrites (OSI Layer 3) or MAC (OSI layer 2).

“Transparent Proxy ‘A’ is a proxy that modifies the request or response beyond what is required for proxy authentication and identification.”
“Non-transparent proxy ‘A’ is a proxy that modifies the request or response in order to provide some added service to the user application, such as group annotation services, the transformation of media type, protocol reduction, or anonymity “filtering.

A security flaw in the way they operate transparent proxies was published in 2009 by Robert Auger and advisory by the Computer Emergency Response Team was published list of dozens of affected transparent, and intercepting proxy servers.