Leveled is a term that refers to an item, npc, etc. that increases in level as the character levels. It is a method of coping to prevent low-level players get high-quality weapons and armor quickly, keeping difficulty up and also reward higher-level players with the items.
For example, if you are level 10, you may find Iron-tier weapons and Hide Armor in a chest. If you are level 50, you may find Glass or Daedric weapons and armor in the same chest.
However, there is a catch. Leveled items will continue to level with the player until interacted with. Thus, unless you know you want the item(s) now, it is best to wait until they have reached max level and therefore max potential.
This concept is applied to various weapons that can be found in-game. For example, Chillrend, widely touted as the most powerful one-handed sword available. However, this is only when the player is after Level 45. If you get it before that, it will stay locked at that of a Daedric Sword, and if you get it even earlier, it may do less damage than even that.
This creates a very dynamic situation regarding the game's best weapons. You may be eager to get them, but for them to be the best they can possibly be, you must hold out for quite a while when you may have already becomed accustomed to the best smithable weapons like Daedric Swords or Bows.