This is a direct excerpt from the Portland Uke Fest web page 2008 (workshop page)
About Class Levels
Level numbers are assigned to class descriptions to help you make decisions about the classes and get the most out of your time here. The teachers will describe their classes on the first evening and you'll have an opportunity to talk to them before making your class selection. One strategy so you don't overload, might be to select two classes where you'll be challenged, because that's where the learning occurs, and one class where you already have an established level of comfort.
LEVEL 1 beginners: This level of beginner just got a ukulele and has perhaps learned one to three chords but stops in-between chord changes to move the fingers to the next location.
LEVEL 2 beginners: This player knows a handful of chords and can move from one chord to another without pausing. May have trouble with, say, the Bb chord shape. Needs chords written out over the words for each song and has developed a strum or two or a finger pattern for picking.
LEVEL 3 intermediate: This player can hold a steady rhythm, and is competent with a variety of basic chords (for example: A, Am, B7, C, C7, D, Dm, E, Em, G, and G7). Understands simple chord progressions (such as I, IV, V chords), can sing and strum at the same time, and learns chords to simple tunes fairly quickly.
LEVEL 4 advanced: This player can hear I, IV, and V chords, has mastered some chord inversions, knows there is life above the fifth fret, and has been there with barre or 4-fingered closed chords. Plays lead and backup easily with others and keeps steady rhythm.
PACING: Classes usually pace themselves to match the participants' abilities. Classes designated level 1 proceed at the pace of the slowest student in the class, i.e., no one gets left behind. Classes designated level 4 move at the pace of the most capable student in the class, i.e., no gets bored. Level 2 and 3 classes try to follow the pace of the majority of students in the class.