Quote Originally Posted by LordCdrMilitant View Post
if they could take a stick and whack some goblins for enough XP to take levels in Fighter and then just keep going from there.
That's assuming NPCs can XP and take PC classes. If you look at high level NPCs figthers and mages, they lack most of the class features of a PC classes [e.g priests NPCs from the MM have 3rd level spells but no turn undead].
(Not to say level up does not really fix abilities which are significantly lower for the average NPC than for a PC.)

While the rules does not force you toward having "chosen ones". It definitely pushes you toward a world where some peoples are gifted in very significant ways compared to others. Not everyone has an enough affinity to magic to become a spellcaster, and not everyone has enough affinity with fighting to ever become a fighter.

And about stability of such a society: a society where everyone can level up as easily as PCs (even 5e PCs) is indeed not stable at all. Unless for some reason you need to kill [and feed yourself of their soul?] your enemy to get the XP and not just defeat him, it would be pretty easy for an army to make soldiers level up quite quickly, and the world to be ravaged by wars between super-soldiers way stronger than "Veterans" from the MM.
Well, you can probably build a stable universe where everyone can level up, but that will not be a low-level one.