From http://www.therpgsite.com/showthread.php?36190-Stuck-in-low-level-dungeons-in-the-sandbox&p=948025#post948025 - 3rd level PC group reluctant to move on from 'starter dungeons'.
Level 4 is really where you hit 'mid level' in BX & its clones. 5th is where the MUs get Fireball and things change from gritty to wahoo. I tend to think that having an easier time at 3rd while being still afraid of the wilderness is a natural life stage for the BX sandbox. Maybe point out that Isle of Dread & Castle Amber both say "for 3rd to 6th level characters".
Normally my expectation would be that at 4th level the PCs would be willing to delve deeper and to make forays into the wilderness in search of more lucrative/higher level dungeons.
One point - if you don't like the advancement rate, consider giving more XP. Moldvay recommends that Basic PCs level up to 2nd in about 3 sessions of successful play, and BECM used a recommended rate of 5 sessions/level at higher level - assumption probably faster at low level. If ACKS does not naturally give out that sort of XP (I know BX/BECM often don't), then consider awarding more XP for eg exploration, for monsters, etc. That's what I do, while not increasing gp treasure drops, to get something like the recommended progression rates, and it works well. Whereas I have played with GMs who stuck rigidly to the RAW on XP awards and had PCs return from harrowing dungeon delves, defeating foes & gleaning bits of treasure, to receive double-digit XP - I rem we once defeated a bunch of skeletons & other stuff (losing the MU when he went into melee) and eventually returned to base to receive 22 XP each. That was pretty demotivating - it would take nearly a hundred such delves for a Fighter to hit 2nd level - and the campaign (on Dragonsfoot) soon died.
You don't have to go the 5e route of levelling them up every session, just look for a reasonable balance that sticks to the intent of the BX/ACKS system. Since your group has 10-12 I'd expect that if they were doing 1st level dungeon stuff they would indeed only earn around 200 XP/session, after all their risks are low. A 5-6 character group might get double that, 400 XP/session gets a Fighter to 2nd in 5 sessions, which seems reasonable. But if they are doing 3rd level appropriate stuff (eg Stonehell level 3) they should be getting around twice that I think, and on the 4th level, which a big group should be able to handle, maybe twice that again.
