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From developers standpoint. It is a way of designing the different elements and concepts in the game to scale and adapt with / against each other. For example, the "attack power" stat / level of your character scales with the "defense" stat of the enemy to determine the amount of damage caused, and so on.

An essential part of that design is to give the player a direct, in-depth control over those stats and numbers ( level / equipment / spells...etc), so he can determine how things "interact" with each other. That way, the player will play the main "role" in the experience.