The Points System was implemented to help users distinguish themselves easier by their actions, users that have higher levels mean that they are more trustful and have done good things for the community like answering questions or having their answers chosen as the best ones.
The "Events" section is the place where you can manage the amount of points gained or lost by users doing different actions like logging in, asking a question, answering a question, etc.
Here you can also set the minimum level at which some of the gains or losses are applied.
In the "Levels" area you can add new levels, modify the names of levels or change the amount of points at which users get promoted to a new level.
To add a new level click on the "New" button, type the level name in the first field and on the 2nd field add the number of points needed for that level, then click on "Save Level".
(!) Documentation based on jAnswers Factory version 4.0.0