How Kube-Proxy Manage Communication Between Pods | Kube-Proxy Working | Kubernetes Training Video 

Kube-proxy manage communication between pods by managing IPtables on the nodes and populating rules for communication. Its actually not the service which does load balancing but kube-proxy which run as a daemon set on all nodes in a kubernetes cluster.
You will learn in detail how kube-proxy subscribe to etcd changes and then automatically add rules in IPtables on the nodes. Service never exists as a process. Service IP is only virtual and it exists only in etcd.
Check this video to have a clear understanding of working of kube-proxy in a kubernetes cluster.
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