Proofreading can be viewed as the final stage of the editing process

Traditionally proofreading has involved reviewing the proof of a document (such as a manuscript) that has been typeset at a print shop to identify typographical and formatting errors before it goes to print.  With a trained eye, the proofreader would systematically read the proof and use standard proofreading marks to point out the errors. 

In more modern times proofreading involves reviewing a final version of a document to identify typographical and formatting errors.  The proof may be in the form of a hard copy print-out or an electronic copy.   Proofreaders may also perform some copyediting tasks.

Because proofreading occurs after a document has undergone rigorous copy and substantive editing, it can be viewed as the final stage of the editing process.  It is the final check to find the small errors that have been overlooked even after numerous readings and rounds of editing.

Definitions:

Proof:  A test version (hard copy or electronic) of a document that is used to make changes to the text before the document is sent for final printing.

Typographical: “A typographical error (often shortened to typo) is a mistake made in, originally, the manual type-setting (typography) of printed material, or more recently, the typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but excludes errors of ignorance…. Most typos involve simple duplication, omission, transposition, or substitution of a small number of characters.” http://en.wikipedia.org/wiki/Typography

Typeset: “Typesetting involves the presentation of textual material in graphic form on paper or some other medium. Before the advent of desktop publishing, typesetting of printed material was produced in print shops by compositors or typesetters working by hand, and later with machines.” http://en.wikipedia.org/wiki/Typeset

References
http://grammar.about.com/od/pq/g/proofeditingterm.htmarmaceutical 
http://en.wikipedia.org/wiki/Proofreading