When your character gains enough all around experience (the main areas of experience are strength [use of melee weapons] accuracy [use of ranged weapons] and skill [hardest to get, win battles while not getting hit much]) then your level goes up, increasing your health, damage, ect. However, you can't just specialize in one area, your strength, accuracy, and skill all have to be high in order to level up.
The modifier in gaining experience in anything is how smart the enemy is.