To raise your power level in Tribes of Midgard, you will need to craft better gear which includes both weapons and armor.
To do this, you will need to gather souls, which can be gained from gathering resources. Every time you gather these resources, you will gain a small sum of souls, which can add up to increasing your total soul count.
However, it's worth noting that it's not much at first but can quickly add up, especially if you make better tools, which will gather more resources and souls at a time.
After resource farming, the next best way to get souls is to clear camps, hideouts, and other areas where monsters and creatures in the game reside.
Clearing these areas will net to you the most amount of souls, so they should always be on your list for farming.
You should also try to commune with the stag whenever it decides to show up on the map, as it will help you gain more souls.
Do all of this, and you will be able to upgrade your blacksmith and armorer and make better weapons to raise your power level.
The better items you make, the higher your power level increase, and you will also find yourself being able to explore more difficult areas in the game.
Check out some more Tribes of Midgard guides at Pro Game Guides!