TD -
In the USAG system, new levels 1 thru 5 are the "compulsory" levels. All athletes in a given level do the exact same set of skills in the same order on each of the 4 events. The compulsory levels are focused on foundational skill development. The new levels 6 thru 10 are referred to as the "optional" levels. In these levels, the athletes create thier routine on each event from a set of required, or available, skills for the given level. You will see the words "new" and "old" used when referring to a particular level because the level system just changed for this upcoming season so to connect between years past and now we refer to old level 5 vs new level 5, for example.
Each athlete, whether compulsory or optional, is judged on the execution of the skill, not against another gymnast. for most meets there will be a set of 2 judges per event (sometimes compulsory meets only have 1) to score each routine against a standard.
Hope this helps.