IRC proxying can be dedicated, transparent or both.
When running as a dedicated proxy, all connections will be automatically forwarded to an IRC server of the administrators choice. Users won't be able to connect to any other servers. Unless used in combination with transparent proxying (both), the users will have to configure their IRC client to connect to the firewall itself.
Alternately, if the host running Tircproxy is a gateway on the route from the users to the Internet, and it is running Linux, or another operating system with the IPF package installed, Tircproxy can run in transparent mode. This allows the users to connect to any IRC server they like, without any "unusual" configuration of their clients.
As a fourth mode of operation, Tircproxy can be run as a generic TCP proxy with no special IRC-related behavior (the -N flag). This is useful if you want to take advantage of Tircproxy's ident features for other protocols, such as HTTP or SMTP.