Difference between make local object and make proxy

Question

When operating on an object linked from another .blend file, what is the difference between the Make Proxy command (Ctrl+Alt+P) and the first option of Make Local Object command (L > Selected objects)

Both of them allow moving the object but not editing it.

Answer 1

Make Proxy adds a new object and sets it as the parent of the linked data. This allows you to transform the empty while still retaining the link to the original blendfile.

Make Local Object copies the object data from the original blendfile to the new file, severing the link.

It is probably better to use Make Proxy because:

• It keeps the link to the original file. If you change the original file, the linked object will be changed as well.
• It keeps your filesize small. Instead of having to copy the mesh data (all the verts, etc.), the only data that's stored is a sign saying "look over there."
• Otherwise, you're basically just Appending (ShiftF1).

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A slight correction to your edit: you can edit the object. You cannot, however, edit the mesh. Here's why:

When you first Link an object, you are linking the Object datablock (cube icon). Linking the object also causes it to bring along the Mesh datablock (triangle icon), because it relies on the Mesh datablock. If you have any materials, textures, etc., those will be *Link*ed as well.

When you Make Proxy, the Object datablock is cloned, but the Mesh datablock is not. This is why you cannot edit the mesh: the Mesh datablock is still linked.

You can edit anything that is a property of the object datablock, such as the position, rotation, scale, material slots (but not any linked materials themselves), modifiers, constraints, particles, etc. You cannot modify anything that is part of the mesh datablock. Examples of things you cannot edit include:

• vertex groups (and, thus, Weight Paint Mode is disabled)
• UV maps
• shape keys
• skin radii

These basic concepts also apply with other linked data types as well.

Answer 2

• Make Local Object > All:
  This is equivalent to appending the object into the new file, it makes a complete copy of the object, which is not effected by edits to the original object in the other file.

• Make Local Object > Selected objects:
  This only makes the object local, while it's data and materials are still linked to the original.

• Make Proxy Keeps a link to the original object, so you cannot edit the object in the new file other than moving/rotating it around and adding modifiers.
  However, editing the original object in the other file will effect the proxy.

  From the wiki:

  A proxy is a legal stand-in or substitute for the real thing. In Blender, when you make a linked copy (described above), you cannot edit the object; all you have is a link to it. You cannot add to it or change it, because its source is in another file that is not open.

The difference between Make Local and Make Proxy is that with Make Proxy, You can assign your own materials, modifiers, etc. as the ones on the original object are not linked to the new file.