Well levels do matter a little, though not as much as other MMORPGs. This low level cap is to let casual players get to competitive levels quite fast.
But yeah, most victories are won by skill and planning. For example, lots of warrior/monks use a skill called Healing Hands, that spell heals you everytime you take physical damage. A warrior with platemail is practically invicible while this skill is used. So if you fight a warrior who casts this spell, it might be a good idea to switch targets, or if you're a smiting monk, cast Scourge Healing on him (Each time a player gets healed, he takes damage instead). If you're the warrior who used healing hands, and die because of scourge healing, you'll probably think twice before using this skill if you're resurrected in that battle.
The one downside of this, is that you will almost never get good results from a team of people you don't know. Since this game requires a lot of skill and teamwork, fighting with people you don't know will often get bad results. Of course if you fight another team of people who don't know each other you have chances of winning.
My best fights were when I grouped with 6 players from the guild Dynasty Warriors and my brother. These 6 knew very well how to play together, and me and my brother obviously also worked well together.
Shikin Haramitsu Daikomyo "Everything I encounter serves as the perfection of wisdom that leads to enlightenment."
