Yeah, it's a party based lvling system. Quests are not meant to lvl your character and I personally like that. In XI Quests didn't even give XP, they were lore only and I liked that as well. I tend to skip all the quests in most MMOs due to them being only a cover up for lvling, while in FFXI they were pure story and I did them cause I wanted to, not to lvl my character.

It's what I liked about XI as well. You play in parties to progress, which at the same time teaches you how to play your class/job in a group and therefore prepares you for endgame.