São os dois.
O nível da magia (0-9) é puramente um concerto para o jogador, conforme @LegendaryDude explica , mas o < O poder de um feitiço é certamente um conceito que os personagens conhecem. Alguns parágrafos no PHB sugerem que os personagens sabem sobre o poder dos feitiços.
PHB 201, Spell slots. Regardless of how many spells a caster knows or prepares, he or she can cast only a limited number of spells before resting. Manipulating the fabric of magic and channeling its energy into even a simple spell is physically and mentally taxing, and higher-level spells are even more so.
PHB 201, Spell Level. A spell's level is a general indicator of how powerful it is.
Outro indica que os personagens precisam ganhar poder para criar ou conjurar as magias mais poderosas.
PHB 201, What is a spell? Uncounted thousands of spells have been created over the course of the multiverse's history [...]. Some might yet lie recorded in crumbling spellbooks, [...] or they might someday be reinvented by a character who has amassed enough power and wisdom to do so.