Correct way in new versions of nginx

Turn out my first answer to this question was correct at certain time, but it turned into another pitfall - to stay up to date please check Taxing rewrite pitfalls

I have been corrected by many SE users, so the credit goes to them, but more importantly, here is the correct code:

server {
       listen         80;
       server_name    my.domain.com;
       return         301 https://$server_name$request_uri;
}

server {
       listen         443 ssl;
       server_name    my.domain.com;
       # add Strict-Transport-Security to prevent man in the middle attacks
       add_header Strict-Transport-Security "max-age=31536000" always; 

       [....]
}

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.