The level of play is ranked as (from highest to lowest):
SDDA-flight 1
SDDA-flight 2
Presidio - AAA
Presidio - AA-A
Presidio - AA-B
Presidio - AA-C
There are also "geographic" divisions (north/central/south), which seem to be purely a way to break the numbers of teams down into smaller groups (6-12 teams), not related to the level of the team. So for example, you might have 2006 Boys, AA-A, North, Central, and South divisions, with 6-12 teams in each group. I feel like the geographic divisions are also used to spread out the teams from the big clubs so you don't have 2-3 Surf/Albion/LAGSD teams playing each other.
Theoretically there is some type of promotion/relegation for the top one or two teams in each subgroup, but it's also based on each club's application to the league and (I assume although I have zero information) negotiations between each club's DOC and Presidio. So if Club-X, B2006 was first place in AA-A North at the end of league play, their club would probably ask to get placed in AAA the following year. (Of course, this is dependent on some core of the team remaining the same! If a bunch of kids turnover all bets are off.)
For reasons I don't understand, the very first year of U-littles the levels of play are by color (Blue/Red/Green), just to make things more confusing.