How are people so high level already?

A lot of it can also be attributed to practice. Knowing what quests to do, what not to do, how to grind etc.
I know during WoW it used to take me forever to level up but the more I did it (alts etc) the better I got, I eventually grinded a monk from 1-90 in 2.5 days without recruit a friend.
Though yeh, in the case of the 40s, it is probably legacy or phase 4 beta

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Originally Posted by SummerSkye

Thanks, guys! I am new to MMO's. I never played Final Fantasy XI or the original XIV. Is that what they mean when they refer to "1.0's"?

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Yes 1.0s are Legacy and Standard who played the original game.

I've seen a few 40s around on a non legacy server. People make exp chain/fate groups, and just rake in massive amounts of exp. It really is the fastest way to do it.