There is an article on this topic in Wikipedia.

It is only intrinsically safe if:

• it has a type test certificate that says so, and
• it has been installed in accordance with the type test certificate.

There is an article on the principle of intrinsic safety in Wikipedia too.

"How does Proximity switches work?"

They activate when the object being monitored comes within detection range. For a more detailed answer, specify what type of proximity switch you have in mind.

Proximity switches are of two types.

1) Capacitive proximity switch

2) Inductive proximity switch

1) Capacitive proximity switch - It consists of an oscillator, a rectifier & an amplifier. The capacitance between the sensing surface & mass (body) increases when an object aproaches the active surface. When the capacitance value exceeds the preset level, the oscillator generates AC signals. The rectifier section converts this AC signal into DC & the amplifier amplifies this signal to drive a relay or a circuit.

2) Inductive proximity switch - These are used to sense metalic objects.

This is basic (and I think sufficient) information about proximity switches. Also there is detailed information about the same too. If you want to get more datailed information about it write in reply.