Although I don't remember the direct sources, there have been a few books out there for d20 based games that discuss what I will call 'legacy items'. These items level over time with the players. They must put in the time with the item and in some cases something else, such as gold for ingredients, a sacrifice of some kind, or as a reward (of sorts) for a momentous occasion. There is also, generally, a minimum level for each enhancement level equivalent on the item. This approach could work for players with magic tomes and such as well.
I'll give an example to help clarify what I mean:
A player wants to play a samurai, and as part of his story, he want a blade that's been handed down through his family's lineage for generation. It has great rumors that the strongest heroes of the family have been able to harness the power of lightning through it.
It begins as a masterwork katana. Functionally, this is all it is at this level. At level 3, the samurai gets 1,000 gold in incenses, food, and other sacrifices, and offers them to his ancestors, hoping to please them. They 'are pleased' by the sacrifice, and thus afford the weapon a +1 bonus.
A year goes by, and although he continues to honor his ancestors it is more time for him to show his own heroism in order to awaken his blade. This comes in the form of killing a tyrant in the midst of a thunder storm. He is now a level 9 character, and his act of heroism has allowed his katana to gain the lightning burst ability.
This gives a good idea on how to approach it. Add powers to the item as the wielder unlocks the power. Use the level suggestions in the Ultimate Magic book as a reference for when they could reasonably gain that power, while adjusting for the powers that are already there. Simply give them the power instead of a new magic item in the same place. It gives that one item a much more personal feel anyway, and players tend to love that one choice item that level with them.
Best Answer
E6, or Epic 6, is a variant ruleset for D&D 3.5e invented on the ENWorld forums and “officially” collected in this thread. There is also a PDF version with explicit reference to Dungeons & Dragons scrubbed. And someone did a bit of work porting this to Pathfinder with this “P6 Codex”.
The concept of E6 is superficially similar to the rules of the Epic Level Handbook (hence the name), in that it provides a way for characters to continue growing indefinitely after the “final” level. The similarities end there, however: while the Epic Level Handbook picks up after 20th level, the usual limit for 3.5 and PF, and provides yet more levels to gain, E6 sets 6th level as the final one, and for E6 it actually is final. Instead of gaining more levels beyond 6th, characters instead gain bonus feats as they gain XP above that which is necessary to reach 6th. This allows the game to continue, and characters to continue to grow and evolve, but without gaining additional levels.
The above-linked documents also have rules for the XP thresholds at which characters gain bonus feats, new feats appropriate for such an environment, tweaks to existing feats for such an environment, and so on and so forth. None of these, however, is really core to what makes a game E6—in common usage, any 3.5 and/or PF game that stops levels at 6th and gains bonus feats from then on is an E6 game, whether they use the “official” XP thresholds and tweaks or not.
The official documents do offer useful insight, however, into why a game might want to stop leveling early:
So E6 was imagined as a way to maintain a heroic fantasy game in 3.5, which it more-or-less does. Ultimately, however, E6 has grown some from its roots (and, in fact, I would argue that “gritty fantasy” really only applies in 3.5 to 1st level, if that, and “heroic fantasy” may well land primarily in the 2nd-6th range). It has been widely recognized that D&D 3.5’s design flaws become more and more significant problems as one increases in level. And, as it turns out, 7th level is something of a cut-off point:
The author does not go into detail here, but the primary big new thing at 7th level is the advent of 4th-level spells. Those are a major upgrade from 3rd-level spells, in some very important ways.
Lower-level spells are undoubtedly powerful, but for the most part, they can be handled or mitigated by a lot of characters—characters with good Reflex and Balance can ignore grease, characters with capabilities that benefit fighting blind are much less affected by glitterdust, fly is a relatively short-duration spell, and so on.
This becomes less true with 4th-level spells. Solid fog allows you absolutely no recourse unless you can teleport. Enervation is extremely difficult to defend against (unless you have death ward, which is also 4th-level), and absolutely devastating in effect. Divine power allows a cleric to basically turn into a barbarian on top of his spellcasting. Dimension door and freedom of movement are the beginnings of spellcasters’ “get out of jail free” cards. Polymorph is just basically cheating. And divination, lesser planar ally, and scrying can completely change the nature of game.
And, of course, you might look at that and say “well yeah, 4th-level spells are better than 3rd-level spells; that’s how things are supposed to be.” But the real problem is that non-spellcasting classes do not get any such power bump. What 4th-level spells offer are a series of attacks that are exceedingly difficult to defend against without 4th-level spells, as well as a series of defenses that are exceedingly difficult to penetrate without 4th-level spells. The rogue gaining another +1d6 sneak attack damage, the barbarian gaining DR 1/– (the fighter and the ranger getting literally nothing), those are just small incremental improvements, not a whole new league of power the way 4th level spells are.
And it gets worse, much worse, from there.
In short, while the four quartiles suggested by Ryan Dancey exist, they are not accessed equally by all classes. In fact, some classes never graduate to wuxia or superhero kinds of play.
So E6 has become not just an idea for maintaining heroic fantasy, but also a very well-regarded variant for simply improving the overall design quality of the game. Since D&D 3.5’s design problems get worse as levels go up, just stopping is an effective measure for reducing the number of problems you have to deal with.