When I read Chainmail, from which many of the magic-user and some of the fighter level titles derive, I realized their significance is they denote a type of figure that encompasses certain fighting and or spellcasting capabilities on the battlefield. For instance, your 11th-level magic-user is represented on the battlefield by a "wizard" figure, and your 8th-level fighter is represented by a "superhero". It's like unlocking bonus characters in a video game.