I believe more in option 2, power itself is simply a matter of development, given the same amount of upbringing and talent, NPCs and PCs only differ in one thing, how important they are. Not how powerful they are.
That said, unlike NPCs, most PCs are the star of the show, they don't need any special edge, they earn that edge by going out and solving troubles, gaining more experience than equivalent NPCs who spend their time sitting at home and waiting for PCs to do things. Of course, NPCs grow in power too, but the very nature of the game means most of them tend to be static in power, barring the rising plot device or rival adventurers.