From BRWiki
The level of a province is a measure of the province's population, technology, and industrial prosperity. It is not directly related to the size of its landmass. A province's level does not represent the entire population of a province; it represents the buying power and prosperity of the province's loyal citizens and taxpayers. It is used to decide how many regency points can be collected by the province's regent each domain turn.
The level of a province is also crucial in determined how many holdings can be contained within a province and, by that, each holding's level.
The province level does not have the same power over the level of source holdings. For them, each province has a source potential level.
See Also: Components of a domain - The expanded explanation in the BRCS
