Overleveling vs Underleveling

[Koh]

If the game allows you to progress without grinding, isn't it balanced? O-o

Not necessarily. Some things, while not necessarily grind-worthy, can have too much of one stat, like HP, which makes it take forever to kill them. Another example is money. While the enemies may not be hard, money could be an issue. Things are way too expensive, and you aren't given enough money to compensate. There's a lot of things like this that make every game imbalanced in some way; there's never perfect harmony.