Wizards have a level from 1 to 4. The higher a Wizard's level, the more powerful he is.
Naturally, not all Wizards are equals – mastery of magic increases through dedicated practice. As one might expect, a thousand-year-old High Elf mage will likely have more magical power in his little finger than an upstart acolyte of one of the Imperial Colleges of Magic has in his entire body. We need a system for sorting between these levels of wizardly potency, and that system is the Wizard level.
The higher a model's Wizard level, the more accomplished a spellcaster he is. A higher-level Wizard will know more spells than a lower-level Wizard. Similarly, he'll be able to put more power behind his spells and receive higher bonuses when attempting to cast them. There are four Wizard levels, each more powerful and learned than the next. If you're unsure what level any of your Wizards are, refer to the relevant Warhammer army book for details.