We analyze the evolution of the potentially habitable planet Proxima Centauri b to identify environmental factors that affect its long-term habitability. We consider physical processes acting on size scales ranging from the galactic to the stellar system to the planets core. We find that there is a significant probability that Proxima Centauri has had encounters with its companion stars, Alpha Centauri A and B, that are close enough to destabilize an extended planetary system. If the system has an additional planet, as suggested by the discovery data, then it may perturb planet bs eccentricity and inclination, possibly driving those parameters to non-zero values, even in the presence of strong tidal damping. We also model the internal evolution of the planet, evaluating the roles of different radiogenic abundances and tidal heating and find that magnetic field generation is likely for billions of years. We find that if planet b formed in situ, then it experienced 169 +/- 13 million years in a runaway greenhouse as the star contracted during its formation. This early phase could remove up to 5 times as much water as in the modern Earths oceans, possibly producing a large abiotic oxygen atmosphere. On the other hand, if Proxima Centauri b formed with a substantial hydrogen atmosphere (0.01 - 1% of the planets mass), then this envelope could have shielded the water long enough for it to be retained before being blown off itself. After modeling this wide range of processes we conclude that water retention during the host stars pre-main sequence phase is the biggest obstacle for Proxima bs habitability. These results are all obtained with a new software package called VPLANET.