Is there any tiers or levels for conferences? and if yes on which basis people and authors can decide that a particular conference is of Tier 1 and another one is Tier 2 ?
The Australian Research Council (ARC) publishes a comprehensive ranking of journals which classified each as A*, A, B or C. This list can be found here.
The best way, however, is to talk to researchers or faculty members from the relevant field. I would be surprised if any researcher worth their salt didn't know what the main conferences are, each conference's preferences and biases, or what notional level of prestige is associated with each.
Some fields rank conferences by geographic scope. For example, you may have local, regional, national, and international conferences. Presumably, but not always, the prestige of the conference increases as it caters to a larger audience. If the conference has enough draw to convince individuals from other countries to pay the travel expenses, it will be more prestigious than a conferences attended only by people who live within 50 miles of the location.
You should also be able to distinguish conferences based on how well-known speakers are. Most conferences release their programs in advance. If your conference has multiple well-known researchers in your field giving several talks each, or maybe a keynote given by a Nobel Laureate, it is probably a serious conference.
The last paragraph of jogloran's answer is good advice. Ask your colleagues in your discipline.
Depending on your discipline, you may be able to find an established ranking of conferences. Computer science-related disciplines heavily gear their publishing towards conference proceedings and, as such, there are resources, depending on the sub-discipline, that can give a hierarchical ranking of 'top conferences' (perhaps, depending on your discipline, a simple Google search could resolve).
As has already been mentioned, conference prestige is often associated with levels of geography, "international" being the highest level. This typically means anyone can submit and so, given the larger audience, there is usually correspondingly larger degree of prestige associated.
Also, it may worth noting that conference impact factor statistics has been an emerging trend as of late. This may also be used, where available, to assess conference prestige.