Of course X stands for XP. That’s a little bit of cheating, since it’s really “experience points.” Experience points are the method in Pathfinder and Dungeons & Dragons (and other games, I’m sure) for increasing in skills and abilities. We get points for killing monsters, completing quests, and various “story awards,” depending on the gamemaster.
As players, we certainly don’t want our characters to remain static (just like in real life). As we adventure, fighting monsters, taking their stuff and negotiating with non-player characters, we learn and grow. I think most roleplaying games have some method for advancement.
If you’re interested in the origins of experience points, I found a useful video on who invented them. And more than you ever wanted to know about them can be found in this thread on Role-playing Games Stack Exchange. Another thread at RPG Stack Exchange refutes what is said in the video, saying that Chainmail had no XP system, that it began with the D&D “white box.”
Wherever it came from, experience points provide a way for the gamemaster to focus players’ attention on a particular quest, and allow characters to improve their skills so they can fight meaner and more über bad guys.
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