Adjusting the level wouldnt have much effect since that only sets the points for initial creation of pretender and scales (less than you, equal to you, more than you). To achieve an Impossible AI would require that you create a god with too many points (very difficult to do) and turn cheating-checks off for the game (not a good idea if players know thats been done)
You can create a nation with many boosts above the normal player as a MOD'd nation and put it in the game.
You can also use map commands to create a nation. Set the pretender (even ones not normally allowed), set scales beyond normal, give magic to the pretender, assign units (even if not normally available), give equipment, give them extra magic sites (evenother nations national sites I think), give that nation certain starting spell already researched, give them extra start provinces, an extra castle or lab or temples. And one advantage over MODs is that the players do not have to have a copy of the .map file with ability to see what the AI got.
I find it easiest to build a text file of the nation, then I can make a copy of the map and append that nation to it. Oh yeah, you can also set the AI to being an AI from the start. AND you can set the AI to be allied with other AIs (which you might also have built).
Quicky list of map commands
http://www.dom3minions.com/docs/map_qref.txt
an example of it being done. The D.A.R.E. alliance. 3 AI nations next to each other with sibling gods, that have already taken control of a big piece of the map.
http://www.dom2minions.com/WEvsTHEM.shtml