Facebook local testing: In which direction data is flowing?

This question is not about how to set up local environment to test Facebook application. Rather I've already set this up with the help of this thread. In short I changed my hosts file and its working great.

But, I've a got a doubt:

Assumption: Everywhere I've read that Facebook server works like a proxy and fetches web-pages, like a web service, from application provider's server and then sends this embedded data to browser.

For testing purposes, I've changed my hosts file like mentioned in above thread. My question is if Facebook server is fetching data from my web server then how come my browser gets this data locally after chan开发者_运维知识库ging hosts file?

It seems either my assumption is wrong or I am missing something fundamental. Please help. Thanks.

Facebook only acts as a proxy server if you are building an FBML app. If you are building an iFrame app, the request to your application is coming directly from the client browser. You can test this out by actually setting your canvas url to something like http://localhost:8080/ and running your app locally. You will be able to run the application like normal, but obviously only you will be able to use it since it is on localhost.