Character leveling is the Elder Scrolls online mechanic that (duh) increases your character's levels. Your character levels up, they gain stat points and can access new parts of the game, both new areas of Tamriel, and new dungeons, raids, and adventure areas. A character goes up in level by gaining XP.

Character XP - XP, or 'experience points' is the way the game measures what your character has accomplished. Characters can gain experience points in several ways.
1.Killing enemies
2.Completing quests
3.Discovering new areas
4.And others

The best way to gain XP is to complete quests. Completing quests earns you large chunks of XP faster than any other activity.

Stat Points-Aside from gaining access to new areas, the big thing you get from character leveling is stat points. Stat points increase your stats--Health, Stamina and Magicka. At each level a player gets a single stat point to put into one stat. How you spend stat points has a huge impact on your game play as Stamina and Magicka power your characters abilities, and Health keeps you alive. A character with low Health (can't take much damage) and high Magicka requires a different playstyle than one with a more balanced stat pools.