The difference between an ultimate factor and a proximate factor in this book is that ultimate factors cause proximate factors to occur. Proximate factors, in turn, cause certain effects to occur. Thus, both of these types of factors can be said to cause a given result, but ultimate factors do so only indirectly.
The major examples of proximate factors in this book are found in the title. The book argues that “guns, germs, and steel” were the proximate factors that allowed Europeans to come to dominate the world. In other words, if we are wondering why the Europeans were able to conquer and dominate so many other people, it was because the Europeans had superior technology and because they carried infectious diseases.
But this is obvious and saying it does not tell us much. Therefore, we have to ask why the Europeans had guns, germs, and steel. We have to ask for ultimate causes. Diamond says that the ultimate causes have to do with geographic luck. He says that certain societies arose in places that were geographically more suited for civilization. This gave those societies a major advantage over others.
So, Diamond is saying that ultimate factors (geography) lead to proximate factors (guns, germs, and steel), and that the proximate factors lead directly to a given outcome (European domination).