Rookie questions

[Coaster]

I have only played one game of Munchkin (but have played a ton of D&D back in the day).

I am confused about 'Level' and 'level' in the game.

The rules suggest that capitalizing the first letter makes a difference(?)

Do I keep track of my character's level (first level character, second, third, etc) separate from my Level which would be where my standie is on the board?

In short is 'dungeon Level' (board) different from character 'level'?

If I defeat a monster (say a weak one, like a level 1 Lame Goblin), do I gain a character level but not a dungeon 'Level'?