Experience, or xp, is something you earn from combat, quests, and other sources, which will earn you an additional level every 5000 you earn. Note that for experience you earn through combat or as drops, it will not be applied until you rest at a campfire (or a bed), and will be lost if you die before doing so. You can see how much experience you will turn in by looking at your threat level bar. With higher amount of experience you gain a higher level of threat. A higher Threat Level grants an Exp bonus but also Increase the damage taken and the rate of hunger and thirst.
There are two Ways to get Experience: