Levels are the same as in D&D. Levels 1-5 are weakish, level 10-12 are getting pretty good, level 15+ are pretty awesome, 20+ are Godly. I could kill dragons fairly easily at leve 15. I also beat the boss of the game pretty easily at level 15.
And 12-18 for act 1? That's insane. Except the first time I played, I don't think I ever waited till after level 12. I remember beating act 1 at level 6, act 2 at level 11, and act 3 at level 16 once. That was back in the days before the expansion. I had unique items (which, at the time, could be used at level 1) that gave me +6 to all skills (could have had +8 but I could never find SoJ's). I was a necro, which meant at level 1 I had 7 skeletons, level 2 I had 7 powerful skeletons, and level 6 I had 7 skeletons + 7 skeleton mages. My friend played a palidan, and had enhancements to his Thorns skill, so all 14 of my skeletons and my golem had thorns. That made the game extremely easy :-)