The Proximity Wrap deformer lets you use one or more geometries as Drivers to deform one or more Target geometries. Each Target geometry binds to all the Driver geometry to calculate a weighted influence for each driver.
The bind state of the Target and Driver geometry is defined by the original input geometry and driver respectively. These meshes must be in the same space, that is, they must line up without any transformations. This is because the original Target binds to each original Driver based on proximity.
When the drivers deform or move, they deform the target geometry. The amount of influence each driver has on the target geometry is based on proximity, as well as several global and per-driver parameters such as Distance Falloff, and so on. Different wrapping modes regulate how the drivers influence the target.
The proximity to each driver establishes influence weighting based on the Falloff parameters. Distances less the Falloff start value will have the maximum influence, and distances greater than the Falloff End value will have no influence.