Level

level, n. 1. in games, esp. RPGs, a stat measuring a character's general standing in regards to power, strength, and experience, usu. designed to recognize growth through achievement over time; also, a measure of the power of a monster, creature, or inanimate object or barrier; also, a measurement of the power of a spell, magical effect, or technological item. Ex: "Your level one Paladin wants to 'arrest' my 8th level Rogue? Fat chance!" See experience points. 2. in older dungeon crawl RPGs, the individual "stories" of an underground dungeon, each deeper level assumed to be more challenging than the previous. 3. in video games, an individual area or chapter of a game, each assumed to be more challenging than the previous, and each usually ending with a fight against a boss. [GJ1]
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Addendum: A large number of games have abandoned the level style of advancement in favor of directly spending XP in order to advance the characters. Another fight for players over what's better...
Addendum #2: Among other D&D jokes throughout its entire run, the webcomic Order of the Stick provided a cute poke at the confusion between Def. 1 and Def. 2 in an Abbot and Costello style. You can find it here.