That’s correct. The diagram in the wiki article Using Caddy as a reverse proxy in a home network will also help you visualise this. In the diagram, you’ll see a Caddy instance running as a reverse proxy. Behind it are a number of services. So, for example, Service A might be Nextcloud-FPM fronted with a Caddy webserver and service B might be Nextcloud fronted with an Apache webserver.
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