Level

Level is a term first introduced in Allen (1978) to express the idea that different types of word formation rules and phonological rules take place in linearly ordered blocks. The idea of levels and level ordering has played a central role in the development of the framework of Lexical Morphology.

Example
English has two types of affixes: stress shifting affixes (= Class I affixes) and stress neutral affixes (= Class II affixes). To account for this, it is assumed that Class I affixation takes place at level I, while Class II affixation takes place at the later Level II. The words derived at Level I undergo the phonological rules of this level, while the words derived at Level II can no longer undergo these phonological rules. More recently the term 'Level' is replaced by the term stratum.

Link
Utrecht Lexicon of Linguistics