In the context of Internet Protocol, 'level' refers to the layers of the networking model, such as the OSI model, which categorizes different functions of network communication. Level 1 typically represents the physical layer, dealing with the transmission of raw bitstreams over a physical medium. Level 2 corresponds to the data link layer, which ensures reliable transmission between directly connected nodes. Level 3 is associated with the network layer, responsible for routing data across multiple networks. Understanding these levels is crucial for grasping how data is transmitted and managed across the internet.