Welcome to Smashboards!
It's kinda vauge, and depends on your area and whatnot, and also how you define it.
I identify strength within general social circles (for instance, I myself am a top level player in my own group, but probably mid-level or low-end-of-high at best on a larger scale). It's fairly easy to look at (but not necessarily to scale) it by analyzing a player's skill across various areas. How good they are at the character(s) they play. How good their technique and timing are. How much matchup and stage knowledge they have. How much knowledge they have of custom moves in those matchups. How often those skills translate into results (i.e. tournament wins). The list goes on.
Low level players, in my own opinion, are the kinds that still have basic mechanics to learn. They routinely forget or fail to use things like spot-dodging, roll/jump getups, tether recoveries, or even shield-grabbing. They go for the same narrow range of options repeatedly (think of anyone who spams Dash Attack on any character, or the Rock-Only Kirby that everyone knows), whether or not it works. They are often unsure about their own character's abilities, much less their opponents'. They ultimately lack knowledge in the game, and it reflects in narrow and repetitive strategies that generally don't work. In my group, this amounts to a guy who rarely plays Smash, and just kinda spams Rock over and over.
Mid-level players fix a lot of that. They know most or all of the mechanics, and can perform them with general success when appropriate. They know their character fairly well, but may not know others. They know several approach/defensive strategies on the characters they know, but may not pull them off reliably or switch them up as often as they should. They have solid technical skill but may still goof up from time to time. In my group, this amounts to the various players who play one character, and play that character pretty well, but not well enough to beat the better players.
High level players are even better, obviously. They know the mechanics and have probably a very good mastery of their character. Their main weaknesses tend to show in stage knowledge or matchup knowledge against characters outside their experience. They're good, but they have room to improve before they reach the top. In my group, this includes several of our franchise veterans who have been playing a character for years, and know Smash well.
The top level players know the most, and perform the best. They may have a single character they excel with, but they'll know how to beat most opponents. They know their options, and generally pick the best one. Executional failures are exceptionally rare. They know the fundamentals perfectly, and know other uncommon tricks to boot. In my group, this is my brother and I, 50/50 against each other but 80/20 or better against all our other friends.
Of course, in the larger scheme of things, my brother and I are pretty competent, but not amazing. I know every matchup in my group due to practice, but I wouldn't know the first thing to do against an Olimar or Toon Link. Watching skilled play, I can understand it, but it takes me numerous tries to emulate it properly. I know what stages my characters do well on, and what to do when I'm ahead or behind. But there's not a chance I could compete with Nairo or Zero.