I talk about this fairly frequently on the blog, and I think that's because it is one of the core tenets of my style of GMing that I need/like to keep in mind. It also comes in handy to have as a reminder when trolling GM support forums and seeing the things folks complain about. The truth of the matter is right there in the title. Power Level is Arbitrary. It is possible, with proper GMing, to make a group of level 1 adventurers feel like Big Damn Heroes. By the same token, it is possible to make 20th level epic characters feel like they're just joe average when it comes to power and ability. Today, I want to talk about that.
It's Relative, Not Arbitrary
The big point here is that whether someone is strong or not, whether an attack or ability is over powered or not, depends on what is around them. For instance, if you have a 90% chance to run into a 10-13th level character (to use D&D terms) every time you went to interact with an NPC that is going to have a huge impact on how you see yourself. If you're level 10-13 you're going to feel like a normal citizen in the city. On the other hand, if you're level 5 you're going to feel pretty weak while a level 17 would feel strong, but not as strong as they would in the default setting where most people you meet are only level 1 or lower.
By the same token if all the encounters are set for a level 10 party, a level 5 party is going to be way in over their head but a level 15 party is going to blow through it with ease.
Everything Is Relative
This isn't true for character levels and nothing else. It's true for everything. Consider a city where the average citizen has 10 platinum pieces on them - disposable income - every day. Compare that to a city where the average citizen is lucky to have a Silver piece to their name on them every day.
Now think how prices will be in that city. How much will an inn room be in the first city? What about the second? The experience might be the same, but the cost is going to be a lot higher in the first one. Why? because everyone has 10 platinum on them for daily expenses.
Changes of Perspective...
Combine these two points and you have the tool to change how your players see their characters in comparison to the world.
Take a level 10 warrior. He fights dragons. He's fought Orc War Chiefs. He may even have saved a Count or two. By all means he is a capable warrior worthy of songs to be sung of them. However, introduce him to a Warrior's Guild where the average member level is 14 and he's going to feel a lot weaker.
Do the same with a party that's rich in gold coins. Now bring them to an area where gold coins are basically silver coins. Or get them involved on a scale where gold coins are not much different from copper coins. They're going to feel a lot poorer.
Now, as your game goes on that warrior is going to gain levels. Eventually he's going to be level 14 and be an average member of the guild. Later he's going to be level 17 and be one of the stronger members. He's going to have grown, and he's going to have a clear indicator to show that he's grown.
That group that suddenly found themselves spending gold like copper. What happens once they're established? Now they have the money to actually spend gold, and maybe even platinum, like copper pieces. They're not just wealthy, they're own your own lands wealthy. They get to grow into that aspect, shown by what they're spending and how much they can do with it.
Both of these things can be good, if not great, when done right in your game. The world - even the fantasy worlds - are bigger than the characters in them. Reminding the PCs of that, showing there is still room to grow, can be a good thing. It lets them look back onw hat they've accomplished and see it not just as vanquished foes, but as a life of adventure, complete with ups and downs.