Web Application Deployment Using Nginx
Nginx is a very high performant web server / (reverse)-proxy. It has reached its current popularity due to being light weight, relatively easy to work with, and easy to extend (with add-ons / plug-ins). Thanks to its architecture, it is capable of handling a lot of requests (virtually unlimited), which - depending on your application or website load - could be really hard to tackle using some other, older alternatives.
Remember: "Handling" connections technically means not dropping them and being able to serve them with something. You still need your application and database functioning well in order to have Nginx serve clients *esponses that are not error messages.
Why use Nginx as a reverse-proxy in front of an application server?
Many frameworks and application servers (including Gunicorn) can serve static files (e.g. javascript, css, images etc.) together with responses. However, the better thing to do is to let a (reverse-proxy) server such as Nginx handle the task of serving these files and managing connections (requests). This relieves a lot of the load from the application servers, granting you a much better overall performance.
As your application grows, you will want to optimize it— and when the time comes, distribute it across servers (VPS) to be able to handle more connections simultaneously (and have a generally more robust architecture). Having a reverse-proxy in front of your application server(s) helps you with this from the very beginning.
Nginx's extensibility (e.g. native caching along with failover and other mechanisms) is also a great feat that benefits web applications unlike (simpler) application servers.
https://www.digitalocean.com/community/tutorials/how-to-deploy-python-wsgi-apps-using-gunicorn-http-server-behind-nginx
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Why do I need Nginx and something like Gunicorn?
Overly simplified: You need something that executes Python but Python isn't the best at handling all types of requests.
[disclaimer: I'm a Gunicorn developer]
Less simplified: Regardless of what app server you use (Gunicorn, mod_wsgi, mod_uwsgi, cherrypy) any sort of non-trivial deployment will have something upstream that will handle the requests that your Django app should not be handling. Trivial examples of such requests are serving static assets (images/css/js).
This results in two first tiers of the classic "three tier architecture". Ie, the webserver (Nginx in your case) will handle many requests for images and static resources. Requests that need to be dynamically generated will then be passed on to the application server (Gunicorn in your example). (As an aside, the third of the three tiers is the database)
Historically speaking, each of these tiers would be hosted on separate machines (and there would most likely be multiple machines in the first two tiers, ie: 5 web servers dispatch requests to two app servers which in turn query a single database).
In the modern era we now have applications of all shapes and sizes. Not every weekend project or small business site actually needs the horsepower of multiple machines and will run quite happily on a single box. This has spawned new entries into the array of hosting solutions. Some solutions will marry the app server to the web server (Apache httpd + mod_wsgi, Nginx + mod_uwsgi, etc). And its not at all uncommon to host the database on the same machine as one of these web/app server combinations.
Now in the case of Gunicorn, we made a specific decision (copying from Ruby's Unicorn) to keep things separate from Nginx while relying on Nginx's proxying behavior. Specifically, if we can assume that Gunicorn will never read connections directly from the internet, then we don't have to worry about clients that are slow. This means that the processing model for Gunicorn is embarrassingly simple.
The separation also allows Gunicorn to be written in pure Python which minimizes the cost of development while not significantly impacting performance. It also allows users the ability to use other proxies (assuming they buffer correctly).
As to your second question about what actually handles the HTTP request, the simple answer is Gunicorn. The complete answer is both Nginx and Gunicorn handle the request. Basically, Nginx will receive the request and if it's a dynamic request (generally based on URL patterns) then it will give that request to Gunicorn, which will process it, and then return a response to Nginx which then forwards the response back to the original client.
So in closing, yes. You need both Nginx and Gunicorn (or something similar) for a proper Django deployment. If you're specifically looking to host Django with Nginx, then I would investigate Gunicorn, mod_uwsgi, and maybe CherryPy as candidates for the Django side of things.