CRM - OrganizationService vs OrganizationServiceProxy
Below are few of the key differences at a high level:
- OrganizationService is a higher level class that provides richer client side functionality and actually uses OrganizationServiceProxy inside it.
- The Microsoft.Xrm.Client assembly that holds this higher level API cannot be used in Plugins etc but is intended for rich clients and ASP.NET.
- It's worth noting that the Microsoft.Xrm.Client assembly has been removed from the CRM2016 SDK. For 2016 projects you might consider using the XRM Tooling assemblies.