What do people mean by "level"?

This may be a silly question. But I'm new at this game, so there will likely be more to follow :) (and I usually avoid the wiki, I don't want spoilers)

I've seen people in chat and on this forum talk about a person's level. What is meant by that? I didn't think we had "levels". I couldn't find it, at least.

Are people referring to the endurance skill or a combat skill level or something?

New myself, but I'm pretty sure it's referring to the levels of the two skills you have active at any given time.

Coming off newbie island 5/4 sword/unarmed, for instance. Or hearing that 'level' 30 is a good level to start grouping in a given dungeon and knowing you should be ok at 31/29 cow/psychology.

Edit: In the context of item levels, it's similar. An item will have a skill item level requirement (say, 30/30 Fire Magic/Animal Handling) and that would be the item's level (30).

OK thanks. Figured it was something like that.