“For every 30 bandits there will be one 4th level Fighting-Man; for every 50 bandits there will be in addition one 5th or 6th level fighter… for every 100 bandits there will be in addition one 8th or 9th level fighter…” – Original D&D, Volume 2.
Original D&D (and its half-brother, the original Empire of the Petal Throne) were full of statements like this about the distribution of character levels. Later editions have been less forthcoming, and in an idle moment I wondered about it. As so often on the internet, while looking for data to analyse, I discovered that people have already done the analysis; as you might expect, most of them focus on Dungeons & Dragons.
Original D&D
This would also apply to Swords & Wizardry and other retroclones, as they share common game mechanics.
Bill Seligman argued in Dragon issue 5 (1977!) that Gandalf was a 5th level magic user, based on the spells he used in The Hobbit and The Lord of the Rings, and that Sauron was somewhere between 8th and 12th level. (Remember that in OD&D 8th level fighters were called “Superheroes”.)
Conan is specifically described in one story as enduring wounds which would have killed any four normal men, so I reckon he was about 5th level at that point; he obviously has more than four hit dice, but not so many more that the wounds don’t bother him. Elric was consciously designed as the Anti-Conan, so I assume he is a similar level to the mighty Cimmerian.
Update September 2015: I misremembered the Conan quote – it’s in The Pool of the Black One: “He had already taken punishment enough to kill three ordinary men, but his bull-like vitality was undiminished.” So arguably Conan is only 4th level… Moving on…
D&D 3rd Edition
This covers D&D 3.5, True20, Castles & Crusades and other d20-based systems.
The Alexandrian has a thoughtful essay arguing that d20 PCs built on the elite array are no more than 5% of the population, most people are 1st level, and the best characters in a realistic setting would be about 5th level.
A couple of Wizards of the Coast staffers speculated what d20 level athletes in the 2004 Olympic Games were, and decided they would be 6th or 7th level. These people were the best few dozen in their field out of a global population of six billion; their mediaeval equivalents would have been the best in an estimated global population of a few hundred million, so it seems reasonable to me that they would have been slightly lower in level.
D&D 4th Edition
Greywulf argues here that Conan would be a 6th level Half-Elven Bard under D&D 4e. (What?!? Still, this is the man who brought us the D&D Disney Princess…) Not the most obvious choice of race and class, perhaps, but 6th level is remarkably close to the other views above.
Savage Worlds and THW
Savage Worlds says right in the rulebook that d6 is average and d12 is world-class; let’s say Wild Cards are as common as d20 elite array characters, about one in twenty, because they are PCs or major NPCs in both systems.
THW games describe Rep levels by reference to real-world equivalents, so they are easy to validate. Again, PCs (“Stars”) being about 5% of the population feels right, because a typical THW skirmish has about 10-12 characters per side, and one Star on the table.
Conclusions
Most NPCs are 1st level, using the standard array; have d6 in their traits; or are Rep 3-4, depending on the game system.
Player characters or Stars are “smarter than the average bear” right from the beginning – they’re roughly on the two-sigma point on a normal distribution curve, one in twenty.
Once a character reaches 5th to 7th level – or Rep 6, or d12 in a trait – he’s amongst the best in the world at what he does – a man (or woman) in hundreds of millions or billions, near the six-sigma point in a normal distribution.
In a “realistic” setting, nobody should be much better than that. In fact, I could go crazy and say 1st level is the mean, and each additional level moves you one sigma away from the mean, so an 8th level character (or Rep 8, or d12+3) is at the seven-sigma mark – one in 390 billion, which is more people than have ever lived, or possibly ever will.
8th level? Best. Character. EVAH.
So what does 30th level mean?
David says: 
Halfway Station 