Your caster level (CL) is the level in your casting class, thus it may be different from your character level in the case of a multiclass character.
Many spells have a maximum caster level, i.e., when your caster level increases beyond the spell maximum, the spell effect does not increase anymore (e.g., Cure Light Wounds reaches its maximum effect at CL 5).
Certain effects can increase your caster level:
- Items with Spell Augmentation enchantment
- Might of the Abishai item set
- Song of Arcane Might
- Sorcerer Savant prestige enhancements
Note that in PnP, a Paladin or Ranger has a caster level equal to class level divided by two (but zero until level four, since they cannot cast spells before that). DDO does not follow that reasoning, so Paladins and Rangers start at caster level 4 immediately once they gain any spells. (i.e. when they reach level 4 in that class.)