Don't hand in power gear quests or do nightfall until you're 260; this is the level that blue engrams cap off at.
Once you beat the campaign, I find the best way to level up is to just patrol, do adventures or public events etc., to level up factions and get legendary engrams. Doing this also gives you a lot of armor/weapons to break down to quickly level up your gunsmith to give you more legendary engrams.
Just to correct myself, blue items can drop up to 262. Regular legendaries can drop up to 265. Luminous legendary and exotic engrams can go higher than 265. Also, your luminous and exotic engrams will continue to scale with your power level as long as you keep them, so it might be a good idea to hold onto them until you've kind of reached a slow point in your leveling.
A good way to farm for exotic engrams seems to be farming heroic public events. These are triggered by doing certain things during the event (ie destroying those 3 little machines during the glimmer farm PE, holding 3 plates during the vex sacrifice PE etc.)
So basically I think the best way to level up is:
-Beat the campaign
-Patrol and do public events (preferably heroic), patrols, high value targets etc., to get faction rep/packages, while also leveling up your gunsmith and getting packages there.
-If you have any missions for Powerful Gear, or you have luminous/exotic engrams, try to save them until you're around 260-270 power.
-Once you've reached 260-270, you might want to start doing nightfalls and decrypting your engrams.
Being part of a clan is also very useful. Completing weekly tasks like win a crucible match, completing the nightfall etc., will reward all clan members a legendary engram for each task. If you complete your weekly contributions to the clan (5000xp) you're also rewarded with a luminous engram, and I believe you can do this per character. So if that's the case, that's basically 3 guaranteed luminous engrams per week if you have 3 characters.
