The wanted level are the stars you get from robbing stores/players, kidnapping, raping players, blowing up cars and gates etc...
Basically every time you do something against the law your wanted level increases.
The max wanted level you will see on your screen is 255 and minimum of 2.
Each wanted level changes your name color which also marks you on the map
2 stars (yellow) - Suspected civilian, L.E.O.-s should use the ticket command on them not attack them.
4-19 stars (orange) - Medium wanted player, L.E.O.-s should arrest or kill them.
20-59 stars (red) - Most wanted player, L.E.O.-s should arrest or kill them.
60-255 stars (dark red) - Maniac, L.E.O.-s need to arrest or kill him, while hitmen just need to kill them for a reward.