Your overall Power level comes from averaging the Power level of your gear, plus any additional levels from your seasonal artifact. Players and enemies each have a Power level and they get compared together. Outside of dictating how much damage you deal, know that activities in the game will have a set Power level and you’ll be more effective when you’re close to or exceeding that level.
Power level in Destiny 2 is a numerical value that determines how much damage you take and deal to your foes - the higher the level, the more damage you deal and the less you receive. How Power level and gear drops work in Destiny 2