Just a useful sort of guide for anybody who might be having trouble in deciding a proper level of power for their character; this isn't necessarily official, but my own views on how the power-scale works.
Violet: This one doesn't need to be talked about too much, mostly because the only characters that should exist in this category are Yukari and Tiandao, as far as I know. Simply, I classify this rating as a "...Hell no."
Purple: Generally, these are the kinds of characters who have a degree of control over reality or cosmic forces, though not necessarily on the level of the Violet category. Most of these characters are either extremely old, or have been granted power by someone much more powerful than they are. In terms of making a character with this level of power goes, you probably shouldn't. If you do, it should be heavily worked over with the admins, since a character of this tier could destroy the planet with little effort (although there might be some political issues with doing something stupid and reckless like that). I think most people could consider this tier a "...No."
Indigo: This is more or less the maximum power-level for most of the characters in the RP, characters in this tier can easily be called "broken as hell". Why? Because they are. Characters with a vague/far-reaching conceptual ability or those with one or more incredibly powerful artifacts should be placed here. In other words, characters that could probably wreck you without even trying.
Blue: This tier is a little more acceptable to have than the above, but not by terribly much. These characters are considered "powerful, but not particularly broken". Characters with a good deal of magic potential or skill, but only perhaps average abilities should be placed here. Really, the only thing that separates High-Blue from Indigo is the lack of a particularly over-powered ability.
Green: This should be the most common tier in the RP, and probably what you should consider before trying to get a higher tier. Things that are in High-Green are usually very physically powerful, but only have average magical potential, thus setting them apart from Blue. Although, this is not always the case, as some characters in High-Green have traded physical power for magical or spiritual power--generally humans. Monsters or creatures like: Dragons, exceptional animal youkai, or characters with an odd, quirky, perhaps tricky-- but not overpowered ability are good candidates for High-Green. As you might expect, Medium-Green and Low-Green are just scaled down to less and less levels of power.
Yellow: These characters are generally those that aren't particularly powerful and/or possess a lesser understanding or capability than those in the Green category magic-wise. Younger characters that are fairly prodigious should go here. It's likely that these characters have a good deal of potential, but are too young or inexperienced to take full advantage of it.
Orange: This is probably the minimum for most youkai, these characters don't have much power or experience at all. Their abilities are also generally pretty mundane or useless. Still, these characters are more than a match for most humans.
Red: This is the top level for most humans that don't dabble in arcane or spiritual practices. Many of the village's militiamen are of this category. Don't expect to win many solo fights if your character is a part of this tier, strength in numbers would be your best bet.
Black: If you're in this category, it's likely that you have absolutely no power at all. You are easy prey for youkai, and nearly all the humans in the village fit this tier. However, while they generally have no physical or magical capability, characters of the Black tier usually have some manner of political sway. It would be boring to play a character that can't do anything, after all.