How To: Proxy in DaVinci Resolve 17
First things first, make sure your folder structure is set from the beginning.
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RAW footage (separate footage into subfolders if the project is large with multiple cams) 
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Proxies (if necessary) 
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Working files (only localized within the DaVinci file) 
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Timelines (only inside the DaVinci file) 
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Render Houses (only inside the DaVinci file) 
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Assets (Illustrator working files, AE files, AE renders, etc.) 
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VO (if necessary) 
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Music & SFX 
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Renders 
NOW we can jump into proxying
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Open DaVinci Resolve 17 
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Open new project 
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Drag and drop files that need to be proxied in the media pool (top left) 

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Select all the files then go to File > Media Management 
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Choose Clips tab 
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Choose Transcode tab beneath that 
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Specify the path to your Proxy folder 
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Choose "Transcode all media" 
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To retain original folder structure: 
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Expand "More options" 

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Choose Quicktime video format, H.264, NVIDIA encoder (if available), Medium quality, and -VERY IMPORTANT- deselect "Frame reordering" to experience a super-fast encode process. 
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Choose custom resolution of 960x540 (choose a larger resolution if you need to) 

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The audio codec should remain Linear PCM 
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Press start on the bottom right of the screen. 
