Residential proxies are IP addresses that belong to real households, assigned by consumer internet providers and relayed to you by a proxy network. The one thing a buyer must know is that you almost always pay for traffic, not for IPs: the price is quoted per GB, so every page, image and retry counts against your balance.
Websites treat these addresses like ordinary visitors, which is why residential proxies are the usual choice for heavily protected sites, geo-targeted checks such as SERP tracking and ad verification, and large data collection jobs. The trade-off is speed and consistency. A household connection is slower than a server, and the device behind the IP can go offline at any moment.
Pool sizes are headline numbers. Bright Data advertises 400M IPs, Oxylabs 175M, SOAX 155M and Decodo 115M. Those are vendor claims, not audited counts, and they say little about how many IPs you can actually reach in the one city you care about.