You can also de-level if you are pre-immortal, but the XP is permanently lost that way. This is useful if you make a minor mistake when taking one level and can easily regain the lost XP. It is faster and less complicated than reincarnation. To do this, talk to the Rowan Guardian in town.
For reincarnation you must be at least level 21. Then you strip naked and talk to the pillar of light near Otis in the docks. Once your old toon is absorbed into the light, make a new character (you must change the name a little bit, or you must wait until the server resets to use the same name). Then talk to the light again and re-level from scratch. You have 1 week to finish, ensuring that all of the requirements are met.