Level Adjustment

Level Adjustment is a games mechanic native to Dungeons & Dragons 3rd edition, which has yet to resurface.

In essence, because different possible PC races have different levels of strength, Level Adjustment was brought in as an attempt to provide some form of balance. It started out as a system called Level Equivalent, where, during character-creation, a character of a particularly powerful race had to start a certain number of levels below everyone else in the party, and... well, that was it. This ended up being an absolutely horrible system because the characters from more powerful races would rapidly catch up in level to their party members, at which point they'd be at a long-term advantage. Level Adjustment fixed this by making characters level up at a rate that was appropriate to their effective character level; under this system, a character with a +9 level adjustment required as much XP to get from their first class level to their second as a character with a +0 LA required to get from their 10th to their 11th. This had the opposite problem of level adjustments being too steep a tax, because as the game progressed, class levels became waaay more important than racial traits.

Getting Around Level Adjustment

Unearthed Arcana included a rule for buying off level adjustment. Once you were a certain level you could spend XP to remove level adjustment forever. This requires every player character having separate XP for the GM to keep track of, and since XP gain is based on your level relative to the Challenge Rating the GM needed to calculate XP twice for everything (the problem is hardly unique to LA Buyoff however, as death+resurrection, level drain and making magic items could all trigger it). Despite this it worked well enough for LA+1 and LA+2 stuff. Since the rule is OGL, any group that bothers with LA races uses it (though it's possibly the other way around: groups that don't use it find LA so horrible they don't bother with it).

Pathfinder, which was based on 3rd edition, just said no to level adjustments. While the system did include powerful races, they were measurably comparable to each other using the "Race Building/RP" system, so it fell to the GM to either disallow overly powerful races to maintain group balance, but if necessary he had the tools to actually change the mechanics of a particular race.

It also featured superior mechanics for playing a monster, by essentially putting a "floor" under it equal to the party's level (so a player wanting to be a troll would have to join a fifth-level party and only gain class levels from there starting at level 1), then dopplering out as the game went one (giving the troll a free level every three-or-so levels as his monster powers become less and less relevant, until he's caught up with the rest of the party).

Monster Classes

Introduced in Savage Species the system is an alternative to level adjustment and racial hit die. Here the more powerful races have their abilities unlocked by taking actual levels in their specific racial-class, "true" multiclassing that came with the benefits of hit dice, skills and so on, and not some imaginary level that incurred a penalty. The original Savage Species required a player take all levels sequentially, and had several HDless levels to include level adjustment, but this was dropped in future incarnation, meaning that players could choose whether or not to take those levels, particularly if it interfered or benefitted their class progression. This would be standard in both World of Warcraft: The Roleplaying Game and Monte Cook's Arcana Evolved series and like many other forgotten subsystems from 3rd edition this would be ported to Pathfinder by Dreamscarred Press.