A character's level represents his overall ability and power.
There are three types of levels.
Class level is the number of levels of a specific class possessed by a character.
Character level is the sum of all of the levels possessed by a character in all of his classes.
In addition, spells have a level associated with them numbered from 0 to 9. This level indicates the general power of the spell.
As a spellcaster gains levels, he learns to cast spells of a higher level.