Just treat the two as two separate entities that have no bearing on each other and you'll be fiiiiiine~

Character Level - a value of how experienced and skilled that character is (however, not a reflection of actual player skill, more story-line driven skill)
Item Level - a value that tells you how powerful a piece of equipment is with respect to other pieces

Just know as either number gets larger, your character becomes more powerful in an undetermined sort of way.