The organizers of the league rank the players at the beginning of the season (beginner, intermediate and experienced). New players are encouraged to participate in a couple of "draft" or exhibition games where they are ranked by the captains of the league teams (I'm one of them). Then the captains get together over pizza and beer and choose teams starting with experienced through beginner. The last twenty or so players are randomly put on teams so that no one is really the "last pick".
This was my first year as a team co-captain/manager. Our first priority in the draft was not to pick any "fun-suckers", we just wanted a team that would show up each game and have fun.
As far as my level of play, I am ranked as a "low-experienced" player. We a dozen or so "high-experience" players who have been playing since they were kids and one who even made it several steps through the Olympic team tryouts.
The league asks players who are extremely skilled to play only in the competitive division, especially if they can't bring it down a few notches and be a teacher instead of a puck hog.
Here's an interesting article from last year if you are interested http://soogoodlife.com/sitepages/?aid=49
The league co-ordinator would be someone to contact if you want some ideas for building your league. There's some contact info in the article or you can check out the league site at http://womenshockeyleague.ca/index.html