Proctor density is a density of a sample of soil after it has been compacted in a laboratory.
The ASTM designation for it (D1557 I think) calls for a soil sample to be sequentially placed in a small steel form (like a can with an open top) in layers. A set hammer size is dropped from a set height for a set number of times for each layer. After the "can" is full with the compacted soil, the soil is weighed and with the can volume a dry density is calculated.
This process is repeated at various moisture contents and the density is plotted on a graph (vertical axis = density and horiz. axis = moisture content). The curve generally follows an upward hump with a peak point at a certain density and moisture. This is termed the max. density or Proctor density and it is associated with the optimum moisture content.
The Standard Proctor (ASTM D698)was developed some years ago and the hammer/height/drops was put together, supposedly, to mimic current excavation equipment at the time.
The Modified Proctor was developed (in the 1960's I think) with a heavier hammer/ higher drop, etc. to mimic the heavier machinery that had been developed.
The % of proctor then is a way to specify and test how compact a material is. The soil is tested in a lab, the proctor density is determined (say its 100 pcf) and in the field the contractor may be required to get to 95% of the proctor or 0.95 x 100 = 95 pcf. This can be tested in the field.
The optimum moisture content is known so if the soil is too dry or too wet, it will be more difficult to get to the max. density. So steps can be taken to dry out or wet the soil to help in the compaction efforts.