One of the good things I've found to keep in mind when roleplaying NPCs, and when designing my worlds - or setting my expectations for worlds - for games is the answer to the two topic questions. Just how strong are the PCs compared to your random, normal person? What does that look like as the PCs progress mechanically through the system and gain levels/xp/power - or however your system of choice does progression. Just as important as that first question though is how rare that power level actually is in the world.
For example, in D&D we have the CR 0 commoner in the monster manual. This represents the average person. Hell, we even have the CR 1/8 Noble to represent what the social elite look like. An everage guard? Also CR 1/8. When building a fight for a "medium" encounter (i.e. one the PCs should win handily) a single level 1 PC is worth 2 'average' guards.
This progression only gets more egregious as the game goes on. by level 5 (entering the second of 4 tiers of play D&D 5e is designed to support) that single PC is now worth twelve CR 1/8 guards. Beyond 5th level we just assume 12 is about good and don't go higher because...honestly, who has the time to track all that?
Other games have a different scale. Shadows of Estern makes a point that a starting PC is an average person for their world. You have that many points to make any random farmer, guard, soldier, or bandit you're using. And what makes the Shadows of Esteren PC a hero is what they choose to face and stand up to despite being just a 'normal' person.
It is important to know about where your PCs match up to your world for a number of responsibilities the GM has like making encounters. It is also important - though less stressed - for how NPCs will assess and thus react to the PCs. It is one thing for 4 bandits to threaten a group of 4 PCs when the PCs are not assessed as significantly stronger than the normal person and the bandit has position. It is an entirely other thing for 4 random bandits to hold up the equivalent of a group of demi-gods whose very presence warps the fabric of reality and draws the attention of demon lords.
Which brings me to the second question. More important than how strong the PCs actually are compared to most other people, is how rare that level of strength is. Is it so rare that the PCs are literally walking legends of historical strength? Are bards tracking their exploits to sing songs and make a name for themselves? Are people looking to challenge them to be the one who took them down? When the PCs come to town does everyone take notice? Or is it "just another group of adventurers coming around?"
This rarity can impact a number of things, but it will especially concern how NPCs react to the PCs. It is one thing when a group of legendary demi-gods walk into town and want to use your shop (whether the PCs have a good rep or bad rep) it is an entirely other thing if a shop keeper deals with people of that level of power all the time.
And when you know how rare it is, and how that works, you can give a different feel to different locations by how you play with that. For example, level 9 PCs out in the middle of nowhere are a much much bigger deal for random swamp folk than they are to a vendor of magical items in Baldur's Gate. Why? Because of how common they are. To the people in the remote swamp they are doing minor miracles. To the magic item vendor it's just another group of jerks looking to trade mountains of cash and gems in for some enchanted goods.
Keep it in mind. Play with it. Mix it up. It makes the world feel more real, and the players who are paying attention will notice when they go from "oh my god, did that person just make food out of air?" to "alright, look, can you please resurrect this guy somewhere else? I have to clean the floor before dinner."