jaekl
Levels are important for all characters, but it might be worth focusing on levels for your spellcasters, and equipment for everyone else at first. I don't recall needing to grind levels much at all in this one; once you've explored/survived the town map, you should be able to explore the dungeon beneath it, and then from there you can start exploring outside a bit.
If you're coming at this game with a Wizardry mindset, note that it's quite different. In most situations, it's better to treat every single battle as a life or death struggle, and cast all your best spells. You can camp once you're out of spell points, with almost zero chance of being ambushed.