Item level question

[Atalius]

What does the level next to magic items mean? For example:

Magic Armor (+1) Item 5

[Loreguard]

Couple things. Level it might be seen as treasure, although you see slightly higher level things as treasure. It also however operates as a minimum level to craft such an item.

[Nefreet]

In addition to that, in Organized Play you can only purchase items up to a certain level in relation to your character level.