It binds the upkeep and recruitment costs, number of available armies and recruitment slot with imperium levels.
Basically all these things are different on various levels (1-7).
See the graphs and the table, they provide numbers which show you what effect each imperium level does.
Example: On level one (basically when you start a new campaign as most of the small factions) you get higher upkeep, but lower recruitment costs. Also you get different limit on recruitable armies and different number of recruitment slots. All based on the imperium level you're currently on.
But on level seven (when you have very big empire) you get lower upkeep, but higher recruitment slots. Also different limit of armies and more recruitment slots.
All levels between have different values. The graphs and the table show it all.
Also this mod does more than I just wrote, but this is the core of this mod. Everything is in the first post, I don't know what else you need
.