AD&D had titles for characters of certain levels, and they grew in fame as they did in power. Some also got other benefits, like a fighter becoming a great leader. I would say their ability scores would factor in as well, lower scores might chase away potential followers or draw ridicule.
Basing things off of the GMG, generally speaking:
-5th level is pretty common. This seems to be about average for the small town hero kind of fame.
-7th level is not too uncommon, though you're starting to get into leader territory. (Fitting, that you now qualify for the Leadership feat.)
-15th level you're talking fairly rare, truly single individual types. Kings and emperors are 15th level.
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To the people within their Kingdom your PCs are Big Damn Heroes, and their lawful leaders. The NPCs within the Kingdom should refer to the PCs as "Your Highness", "General" or whatever other title they may have.
To the people beyond the Kingdom, look at the ranks:
King > Duke > Baron > Other Titles (the other titles should count as Noble Titles though the PCs are definitely above the rabble).
As far as levels go, for the most part it's an abstraction and the NPCs wouldn't care what level the PCs are just what title they have.
Finally as to level Demographics?
In my game the vast majority of NPCs are level 1-4. Fairly rapidly achievable with only a minimum of adventure or years of labour under the belt.
Uncommonly you'll find NPCs of 5-8: These are usually people of note and renown, the PCs should have heard something about these NPCs before they meet them as they've probably done something notable by this level (For example - Killed a Bandit lord and his minions, and fended off a Troll Invasion).
Rarely you'll find NPCs of levels 9+: These characters are legends, with at least 3 BIG EVENTS to their name. The PCs have definitely heard of these people before, and their legend should precede them. The exceptions being of course Assassins and Spies, who would likely be very good at keeping their names kept off the public record (but their deeds are likely known).
Once you hit level 10+ You're epic level as far as I'm concerned.
Of course these are the assumptions for my Golarion and YMMV.
The fact that they are newly entered into the nobility with their own Barony has more to do with their fame than their actual level, which is a game concept that NPCs are unaware of. Nobody goes around asking each other: "What level are you?" and reacting accordingly. Or they shouldn't, anyway.
I would say that at this stage, they are locally famous, very well-known within their own Barony, of course, where they are the richest, most poweful folks around, or at least are perceived that way. In Brevoy, the River Kingdoms and perhaps Galt, they would be only moderately well-known, certainly not household names, but people in the know would have heard of them.
In my game, their growing renown is playing out with regard to the backstory each of them gave me. Our new Baroness, who was the 8th child of a noble family in Brevoy, finds herself being overwhelemd with mooching relatives who want to take advantage of her new status to secure positions for themselves. Our dwarven general has been approached by an old friend who is a member of the 9th Battalion, who asks him to ensure the new kingdom serves as a place dwarves can prosper and get ahead, and has directly asked for control of mining operations. The spymaster, a reformed bandit, has enemies from his past that are shortly going to come calling for him.
Fame has many benefits, but it has some complications as well. I'm having fun with it, and I hope you will, too.
One thing you need think about as far as fame is the ability to be recognized. We all live in age with TV, inter-net, phones with cameras, news paper, magazines, ie lots of photographs. For the Most part in fantasy setting I think that most of these things do not exist. There for faces may not be that highly be recognizable. If you find your self outside your close circle may folks may not know how you are at all. With out some symbol of command or rulership. Ie (Crown or Crest, ect) Out side your land they may know your name/ and or Symbol but putting name with face may be still hard. There is a William Shakespeare play that king walk amongst this army of men to listen to what that say before big battle and they do not know him. His onw men that they our there fighting and will to die for but, yet they still do not know his face.
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Another thing to consider is the mechanism by which the players become "famous" in their own campaign. Successfully raiding an ancient dungeon is a heroic feat worthy of song, but it's not a very "public" activity. If nobody actually sees it happen and reports on it, such a quest is more likely to remain the subject of rumor and gossip. It's the difference between:
"Did you hear? Rothgar the Mighty and The Wily Marene scoured the Tombs of Terror of their evil influence!"
and
"I heard that some guys cleaned out the Tombs of Terror a while back."
Of course, if the PCs face down some monster in the high street of the town, they'll likely be lauded as heroes and earn a reputation, even if it's just seeing off a band of raiding kobolds.
Then there's the matter of WHO knows the PCs and why. A PC who invented a particularly cool spell might be famous, but only among bards or wizards - the tavern keeper has no idea who he is or else has heard of him but doesn't understand what his achievement means.
As an example, in the campaign I run, I have three PCs in the group who have some notoriety of different kinds:
The first is an elven bard. He's very well known among certain members of the nobility, but not for his deeds or his accomplishments. He's a member of a noble family himself, and the local rulers want his country's help as allies against another local power. (His actions have garnered him a reputation there as well, as an enemy of the state!) Thus he's being constantly recognized wherever he goes, and pressured by the local lords because they all want something from him (something he may or may not be able to give, in time). He's been dealing with this since 2nd level, basically. Commoners would recognize him as a noble by dress and bearing, but would be mostly unaware of his reputation or activities. He has another problem, as the only noble in the party, as well as being the party's "Face" guy, his personal reputation tends to accrue all the credit for the rest of the party's actions, for good or ill. (The rest of the party rather prefer things that way)
The second is a Priest who through a combination of bad luck and modicum of inattention had a warrant mistakenly sworn out for his arrest on a kidnapping charge, and later ended up leaving a girl at the altar in what was supposed to be a very public surprise wedding (that he completely failed to see coming despite several hints). As you can imagine, his reputation has taken something of a hit. However, because he is a foreigner with no other major deeds to his name, he's actually done more damage to his religious order's reputation, as most people identify him not by name but as "That Selicari Priest". This is a relatively recent development.
The third is a wizard, who has come into possession of a rare artifact. Word has begun to get around that he has it, but it's a very obscure item and only of interest to other delvers into arcana and eldritch lore. So, only certain powerful mages or especially learned NPCs would be likely to know his name or recognize him. (Bad news for him, as he's only just made 5th level, and he's going to have some powerful folks gunning for him)
All three of these are 5th level characters, BTW.