QuoteI'm probably going to give up on making sense of it and run crazy fun dnd as it was designed. I just love the historical fantasy style and want the systems to support what the world is doing.

Now that's a great idea! You're the DM, the world doesn't do anything unless you will it or through player interaction with it. If you really just can't handle all the 0-level NPCs, try this idea (also from IMAGINE magazine):

The Freeman: Cities are not just populated by a mixture of exotic adventurers and thousands of 0-level fighters (Normal Men). There will be many representatives of the adventuring classes, and there will also be the social also-rans, the low-lifes, but a great many of the people will be Freemen and Freewomen, representing merchants, business people, functionaries, clerks, bankers, and many other mundane professionals. In order to allow these people a little more depth in this campaign, it is suggested that the DM make use of the Freeman character class, detailed herein. Note that this is not intended to be a character class available to players, and after a quick look, very few of them would be interested anyways!

Character Abilities
   Ability scores are as normal and are rolled as normal. There is no reason why these people should be anything more or less than the average adventurer. In certain circumstances, the DM should reduce some ability scores to allow for the less-than-strenuous training that these non-adventurers will have had.

Bonuses Due to Character Abilities

   Strength:           No attack/damage bonuses
   Intelligence:   Normal Language bonus
   Wisdom:           Normal Saving Throw bonus
   Dexterity:           No missile bonuses
   Constitution:    Ordinary (non-fighter) bonus
   Charisma:            Normal

Character Class Details

   Hit Die Type:   d6
   Max Hit Dice:   9 (+1hp for each level 9+)
   Spell Ability:   nil
   Level Limit:           none
   Armor:      any, but rarely worn
   Weapons:           any; 1 proficiency only
   Combat:      as per Magic Users
   Oil?:              yes
        Poison?:      Yes
        Race:              Any

Levels
The level of a Freeman/woman is not determined by experience points (as defined for PCs) but rather through a combination of age, wealth, and influence. At 10th level Freemen/women become members of the nobility. Thus, a simple bureaucratic flunky could be 1st level, the journeyman of a guild 2nd level, a wealthy trader 5th, a courtier 8th, and so on. They may use any magical item usable by a fighter or a thief. They also save as Fighters.

Quote from: Cranewings;267109We came up with something like this as a guide to what level different kinds of NPCs would be, to reflect the diversity of training and skill:

Level 1          16 y/o new recruit
Level 2          seasoned adult
Level 3          professional
Level 4          community leader
Level 5          high caliber example such as a Spartan or Roman Legionair
Level 6          Captain of the City Guard, Roman Officer, 35 y/o craftsman
Level 7          Guild Master
Level 8          Centurian
Level 9          King's Bodyguards
Level 10         Old Hands - white haired retired masters
Level 11         King's Chief Assistants
Level 12         General

Quote from: Elliot Wilen;267524My current line of thinking is that NPCs may have levels, but they're not a factor of experience, just bad-assitude.

Mix these two, and you have something resembling my attitude. Most mundane NPCs won't ever go above 10th even with a life of hardship and challenge. But some talent, some destiny, adds another 10 levels of "potential" to the mix.

QuoteGenerally speaking, only PCs gain levels.

I agree, for accounting purposes, unless I have something special in mind (like a villain who starts at level 10 when the PCs are level 1; I let him gain xp at the same rate the PCs do. Considering the XP curve, the level gap will shrink.)

Quote from: Elliot Wilen;267524My current line of thinking is that NPCs may have levels, but they're not a factor of experience, just bad-assitude. Generally speaking, only PCs gain levels.

Works for me. That's why a sorceror who has been conducting sinister experiments in a ruined tower for 40 years can be level 7. NPCs don't have to do the same things as PCs (ie killing things and taking their stuff) to level up. In fact, they don't have to level up at all.