NPC Level and Age

It is sometimes worthwhile to try to figure out exactly what level a given NPC ought to be. The usual presumption of the D&D world is that, eventually, players will simply be considerably more powerful than anyone they encounter in the "mundane" world. After all, XP is gained only through overcoming life-threatening challenges, an experience foreign to most NPCs.

Or is it? The average medieval world is fraught with danger. Each person living in a medieval world faces death from disease or injury or accidents fairly routinely. Likewise, it seems like limiting "experience" to only life-threatening situations severely devalues education, for example. Our sense of the "real world" tells us that people gain levels (albeit perhaps not very many) simply by living their lives and doing their jobs.

NPC Level and Age
The simplest way to implement this change is to just grant NPCs a level each time they reach a new age category. Thus, upon reaching middle-aged, a level 1 commoner becomes level 2. That same commoner becomes level 3 upon reaching old, and level 4 upon reaching venerable.

While it is true that this does put old people in the realm of "exceptional humans" when compared to the real world, there are a few things to consider: one, their physical stats deteriorate sharply; and two, "exceptional" is relative. While a level 4 character is exceptional in a world where only the best and brightest of a generation ever reach level 5, and nobody ever reaches level 6, in a world where the best and brightest can stand toe-to-toe with demigods, level 4 suddenly doesn't seem quite so amazing.

This rule also has the effect of mitigating the "Dragonwrought Kobold" problem. If a kobold is venerable, he is necessarily at least level 4, which helps to negate some of his early advantages.

Certainly exceptional NPCs will be higher-level than this. Whether or not such NPCs have had careers as adventurers, or if they simply have gained levels through other means, is a question for the DM to answer.