The vast majority of my campaign world's populace have one level in an appropriate NPC class, usually commoner, sometimes expert.
Most magic casters are adepts rather than having levels in a PC class (low magic game); most nobles are warriors; most officials are aristocrats or experts.
Likewise, military forces are composed of commoners, warriors, and experts.
Someone who's pretty accomplished at arms or at a skill will probably go up to NPC level 3, but theoretically most stay at level 1 from adulthood to death. Kids are basically 0th level (unless they're undergoing some sort of rigorous education, which is uncommon).
This is fairly close to how I run it myself. I use the default population assumptions from the 3.5e DMG for the main NPC classes (Commoner, Expert, and Warrior), but for PC classes, Adept, and Aristocrat, in most cases they are specific NPC's with a name and a purpose (at least in small town settings).
I once did mini stats (HP) for an entire hamlet that was being attacked by an orc tribe (and had to hold them off until the PC's arrived to save the day). The Commoners were only the most basic of militia -- literally spear carriers -- while the Experts had actual armor (leather) and better weapons (crossbows or swords). The village elder was an Expert 3 and had chainmail.
The local noble's "professional" force at his tower were primarily Warrior 1 with studded leather armor, crossbows, and melee weapons, with sergeants of War2-3, and a Captain who was about Fighter 4. The noble himself was something like Aristocrat 4 and had a young (Cleric 2) chaplain. And I had a few NPC's scattered about the region -- a retired wizard, an adept/witch who lived in the woods, and a half-fey miller (Expert) were the ones that every remotely mattered.
That, of course, doesn't count the baddies, who included some low level adventuring types and some that count as high level in my world (~8th level plus) and were comparable to/slightly better than the PC's.