Until you reach level 50, average item level will not have a major impact on your ability to proceed through the game. Simply playing normally and using the Recommended Gear function should suffice, and your average item level will gradually increase.

From level 50 onwards, certain duties will be unavailable until you have a high enough average item level. Buying better gear on the market board is an effective way to raise it.

You will also earn Allagan tomestones, which can be exchanged for equipment, for completing duties of level 50 or higher.

Although it may take some time to gather enough tomestones, the gear for which they can be exchanged is very powerful.