The Rank System has tiers from F through S, with - and + gradients for differentiation among the tiers. It is rare for a player character to have Master Rank below D unless they literally cannot fight at all; however, most characters' base mode will be Rank E or F. Similarly, it is rare for players to have a Master Rank above A; such power would indicate nearly divine (or demonic!) inherent strength. But just like base modes, many characters will have super modes in Rank S.
Broadly speaking, F and E are the Ranks for people who don't actually fight. Rank F is exclusively the domain of those who are actually physically disabled or who are very young, or otherwise just completely useless in a fight. Hayate Yagami is Rank F, as is Tomoyo Daidouji. Most inhabitants of Fairy Worlds are Rank F, as well, on account of being useless blobs of adorable.
Having a Base Mode of Rank F indicates personal frailty - a character's body is weak, they are for some reason utterly unable to use magic, or they're like five and your body and soul are still developing. It might also, however, indicate that they're just completely useless in a fight. Maybe they have lived a life of luxury, and entering the field without magic at their disposal is not something they're equipped for? Only the extraordinarily young get into Rank F by age; even 8 and 9 year olds begin to clock into Rank E for BF's purposes. However, this can change a little depending on how exactly it's portrayed; a ten year old in a series about high schoolers, portrayed as frail and weak, would be Rank F, but a 10 year old in a series about ten year olds is probably portrayed competently, and thus Rank E. Hayate Yagami has a Rank F base mode, on account of her paralyzed legs and hobbled magical development.
Largely, having a Master Rank of F indicates much the same, except even worse; it means a character has absolutely no ability to effect a fight at all outside of calling encouragement to their friends, due to a lack of magical power. Tomoyo Daidouji has a Master Rank of F, because her contribution to battle consists almost entirely of hiding in the bushes with a camera.
Rank E, by contrast, is human average. Most characters' base mode is Rank E. Rank E represents no disability, but rather a lack of magical combat capacity. A Rank E person in a fight with a monster might be able to whack it, maybe even hurt it some, but is by and large going to be in the way more than anything else. The vast majority of human beings on Earth are Rank E. Usagi Tsukino is Rank E, as is Amu Hinamori.
Having a Base Mode in Rank E mostly means you are an ordinary person. Almost everybody's Base Mode is Rank E.
Having a Master Rank of E, again, means something similar, but with the added caveat that it also means the character probably can't transform or summon monsters at all. They're just an ordinary human being caught out on the stage. Naru Osaka has a Master Rank of E, as would most noncombat OCs.
Rank D is where the rubber meets the road. Rank D is the zone of overlap between pure physical combatants and weak magical fighters. There are perhaps a few thousand Rank D people in the entire Greater Tokyo Area. Powerful, unenhanced fighters might be Rank D, like champion boxers or world-class soldiers. Relatedly, it is much, much harder to take the arts of magic to superlative heights than it is to gain it from magical benefactors; this means even professional magical soldiers like Time-Space Administrative Bureau goons or Megalomesembrian wizards are usually Rank D. Trainees might even be E! Narratively, the idea of Rank D is that someone in a Rank D henshin can probably keep a monster busy, but wouldn't be able to beat it, especially not alone.
(Incidentally, this means the TSAB rank system from Nanoha, although the inspiration for the one we use, does not apply; they normalized around their own soldiers, which we didn't. Nanoha might be absurdly high-ranked on the TSAB scale, but she's only a C here!)
A Base Mode of Rank D indicates that a character is quite extraordinary in some way. It is very rare, especially for protagonists. Perhaps they've trained their magic to the point where they can fight for a while before they need their battle defenses; or maybe they're a karate champion or an elite soldier who can fight alright on their own before they need the power of their contract. However, since Base Modes lack things like Special and Finishing attacks, most Master Rank D characters -- even ones with a Base Mode of Rank D -- have a separate Henshin Mode at Rank D to represent their taking a moment to summon their chi or narrow their focus, battle-readying their spirits before they proceed.
Rank C was the game's average when everything began. Rank C is the power level of a beginning magical girl, or a powerful wizard. It is POSSIBLE for a non-powered combatant to reach this level of power, but such an individual would need to be one of the greatest fighters on the planet, and probably literally pushing the limits of what a human can achieve without awakening to chi or magic. There are maybe a few hundred people in the entire universe who hit Rank C without using magic or technological enhancement.
Partly, this is because doing so is kind of ludicrous. Rank C is an achievement, for a magician, but it is not nearly the achievement it is for doing it without magic at all. It's much more common to see a wizard (or martial artist harnessing chi, which counts as magic for this purpose) attain that vaunted rank, but even that's not terribly common. To the trainee wizard, Rank C marks one as one of the rarefied elite, terribly powerful and wonderfully mighty.
This is why, when demons returned to the world, the wizards were helpless. Rank C was deemed as a respectable achievement for a career wizard; it was deemed a speedbump by the powers of darkness...and only the beginning, by the newborn champions of Hope. Attitudes on Earth and in the magic worlds are certainly changing to this new standard, but that hasn't changed the fact that it is nearly impossible to mass-produce the types of magical warriors needed to fight the powers of darkness...and so it is up to those rare few blessed by the Powers That Be to defend the universe.
On which note: Rank C is where almost every character begins, FC and OC; it is the standard starting player power level. Sailor Moon started at Rank C, as did Barrier Jacket Nanoha Takamachi and Cure Black.
Rank B is the tier of the mighty. Magical girl modes of Rank B represent considerable seasoning and battlefield experience, as well as, more often than not, some sort of tangible power-up from an artifact, divinity, or other source of imbued awesome. Any character who starts at Master Rank B has to explain the source of this experience and power (one or the other isn't enough!).
Occasionally, a new magical girl will awaken at Rank B if the stars align and their associated power source is at full potential (mostly this is a flimsy IC excuse to say you're allowed to awaken above Rank C if you're in a cast that has mostly already advanced to B, particularly if you've worked hard as well).
Rank A is the tier of the unbelievable. A Rank A fighter is a phenomenon all to themselves. For wizards, before Clow Reed's great working rattled the worlds, Rank A was a dream achieved only once every few hundred years, a sign of the coming of a true Magister Magi - a true Great Sorcerer. It is less rare, these days...but that might simply be because something like thirty of them came out of the woodwork during the Bellum Scismatica.
For magical girls, there have been a handful of Rank A fighters across the centuries, but in the last century since the new surge of magical girls swept across earth, the number has spiked wildly, beyond any expectation.
Attaining Rank A as a mage is a sign of incredible talent, incredible gifts and incredible drive.
Having a Master Rank of A indicates that you have the capacity to not only wield a great deal of power, but to control it; having a rarely-used 'the chips are down' A-ranked Henshin Mode as a Master Rank C is not unreasonable, but the mana surcharge will have you knocked out of it very quickly. It's literally exhausting to use. Once you've advanced to Rank A, you can fully and freely control that mode -- the surcharge is now gone!
There are currently no combatant protagonists with both Master Rank and Henshin Rank A. There are a few noncombatants, or antagonists who will later become protagonists, at which point their power levels can be reassessed according to the needs of their cast.
Having a Master Rank above A indicates enormous, unfathomable power; it almost never happens. Many magical girls learn the trick of boosting their power beyond their normal limits, 'overclocking' themselves to pull down the might of God's love or the fury of the universe's wrath, but very, very few master the trick of reaching such heights using nothing but their own power, such that they can do so nigh-indefinitely.
As noted in Rank D, very occasionally, some poor soul will attain a Base Mode of Rank S. Such individuals are rarely themselves anymore; doing it almost certainly means they gave away their soul and body to darkness, and are now little more than vectors for which some foul god can taint the cosmos. But in exchange, oh, the power...