I ran into this on the boards some time ago, and use it as the default for my realms game:
1st-3rd: apprentices just starting out
4th-6th: Professionals, beginning to make a reputation
7th-9th: Accomplished professionals, recognized by their peers.
10th-12th: Consulted by the powerful.
13th-15th: Significant authorities in their fields, well-known professionals whose services are in demand
16th-20th: Well-known heroes
21st+: Epic
The way I justify it in my mind is to basically assume that everyone who lives long enough settles down to between 4th and 8th level, including commoners, experts, etc.
Of course, there are heaps of lower level guys, but they die in an 'inverted pyramid', the most die at levels 1 to 3, the next most at levels 4 to 6, and so on, with the new recruits, youth etc, refreshing the 'top' level of the pyramid, and level gain moving characters along the pyramid.
I thus tend to think of the average town guard/soldier/tracker/baker being about 4th to 6th by the end of their lives - they are making a reputation of sorts amongst their peers, but by no means are they notable for their deeds on a grand scale. It also explains both how these smaller human armies regularly defeat orc hordes (being higher level than the hordes, which are disorganised, train less, and die earlier) but also can be killed an an indivudual level by a few orcs.
Bear in mind that for this campaign I decided to assign NPC (and to some entent PC equipment) using the 'Mark I Eyeball' device, so NPC's are geared differently to DMG assumptions - typically much less permanent magic, but much more disposable magic(so YMMV with my level splits).
Anyone (PC or NPC) who hits 10th is playing in the big time, but they are the lowest of the low in this "big time". I hope that this will let my PCs feel special at that point, with the clear understanding that there is plenty of tougher stuff out there.
Rassilon.