When people with no amour and an iron dagger can almost kill you? It's a challenge, but some of it makes no sense. However, that could be a combination of that and the level scaling.

Are you a mage?

Nope sword and shield heavy warrior. I tried killing Kevel the Tongue at 16 and got wiped using full dwarven and Lydia also had full dwarven.

All I can say is don't ever stop blocking when fighting melee or you will pay for it on Master.

I'm predicting that the big skyrim overhauls will change level scaling again, but in a different way than oblivion. For example, it would be a good idea to stop bandits from scaling alltogether after a particular level. Skyrim got it right when it went the other way round, because dwemer, falmer and nature (spriggan) enemies are all scaled in such a way that you need a decently well trained/equipped character to attempt those dungeons. But the other way round, there isn't a lot that you outgrow. And maybe you should be able to outgrow several kinds of enemies.

Jobs are important on Master since you NEED to buy supplies for fights and dungeons.

Do you use smithing or enchantment?

When you use things like smithing and enchantment, you just plain add onto the damage you deal and armor points you have. With alchemy, you can make potions that just flat-out give you +50% bow damage or the like.

Difficulty is just multiplying the health and damage numbers that the enemies have. If you deal twice as much damage per swing because you are a master smith, then you'd need to double the HP of the enemies to put them back on the same playing field as you.

Of course, it's also for people who are excpetionally good at dodging or the like, who can kill most enemies before they even take damage at all, and as such, want enemies to live twice as long and make battle more exciting because they'll get one-shot.

Again, however, there is absolutely no point in putting on Master difficulty if you feel it is too hard - it exists purely for when you feel other settings are too easy. There is no score, no competition, nothing but a single player game for you to enjoy.

in the early elvels you are actually BELLOW most mobs skill sets, for a good while.
thats why focusing on 3 core combat skills untill they reach 70+ so you can compete asap.

there are no skill sets bellow 25 that I know of and apart from the lower rank bandit mobs, most opoenents will have 50+ skill sets and perks.
that means that you will be competing with these mobs for the 1-20 levels having an average of 20 or less on your core skills while having bad quality armor and consumables, so yeah, master is very hard at start, but that "thief with no armor and a dagger that almost kills you" quickly turns into a harmless mob that only serves to level your armor skill faster.

I smith slowly so I don't level up too quickly. However, my heavy armor is only 36 and that's probably why I'm getting owned.

Bandits don't level scale. They ARE always level 1.

Bandit Chiefs will be tougher - when I fought a bandit chief at level 1, he took out 80% of my health in one swing on Adept difficulty. He still was only wearing fur and swinging a greathammer. As I've gotten tougher, they have dropped in difficulty, but bandits have always been one-hit-kills for me.

I think this is a myth on the part of players who just assume that Skyrim is exactly like Oblivion until they see concrete proof otherwise. Wolves, snow trolls, giants, bandits, these things don't scale, but people complain about how Bethesda is level scaling, anyway, which really tells you how these complaints are impossible to even try to address.

It was a Vampire Thrall.

I didn't mean bandits as only the enemies named bandits, I mean the groups of enemies referred to as bandits. Yes, bandits will always still spawn and are always easy kills, but then there's the bandit thugs and bandit highwaymen that are as sturdy as dragons at times. And all the while they still use rather ordinary equipment. That's my main problem with the bandits.

I'm also playing a sword & shield warrior on Master. At the start it is kind of difficult, specially boss mobs (I hope you're an Orc for those tough fights)

But now I'm level 41, have 100 smithing, 100 1-handed, 90+ block and 70+ heavy armor.. and my character is pretty much unstoppable. With strong armor and block, you can survive any kind of melee attack. Giants that used to one-shot me now go down without taking 10% of my health.
Don't forget you can shield bash to interrupt enemy power attacks (they will hit hard even with block and heavy armor), and get the Spellbreaker shield to deal with mages and dragon breath

if it is your core defence skill, then yes, you definetely need to make it go up, its a comon problem, especially playing master, you will be wanting to avoid getting hit at all whenever possible, so it levels slow.
I recommend using a shield for the harder hiting enemies until you get your health pool and armor rating up, even if you dont want to perk it, its the best melee defence.

Full Dwarven armour at level 16?

Armour itself does not make the man (or avatar). If I recall, level 16 was around one of those transitional levels where the baddies are somewhat stronger than you are, plus at level 16 it's unlikely that you are anywhere near your full lethal potential.

I'm not being specifically critical of you, OP, but you seem to have fallen for the trap a number of posters have stepped in...they tank up expecting to be the warrior hero of skyrim far too early.

Edit:

As earlier posters have suggested, seriously look at improving the 'block' skills and use a shield...some of those higher block perks are worth their weight in gold, they won't make you impervious, but they give you a real edge.

I am far from an expert, but from playing an orc duel weapon wielder that leaned heavily on smithing and heavy armor.....I still took a beating.

So I believe, until proven wrong, that your offense is King.

Get your damage skill up high asap before any other skill.

At least it feels that way to me so far.

Wow. From other posts I would think that your character with no armor and a dagger would be way overpowered on Master

Master should be something that is very very difficult. Some say it isn't, but it seems that it gets easy if you get to a very high level and get fantastic armor, weapons and enchantments.

Other than that, I would expect your character should be killed very frequently, unless you are extremely careful -- particularly at lower levels when your armor and weapons aren't so good.

I'm playing on adept now, and having challenges at level 12. Eventually I may bump up the difficulty on a new character. But Master should not be a normal playthrough. In my opinion.

I read the article though don't have time for an elaborate post or long answer so i'll just say one thing.

All this procedure, scaling etc is done for one reason - challenge. Correct? Continuous challenge throughout the game.
Is it really worth it? Is it really so important if EVERY encounter stays challenging on high levels? Is it the natural way of leveling to get challenged almost equally by the same enemies at level 5 and at level 50?
Do we want static challenge?

Personally i prefer less challenge from most encounters at higher levels rather than static challenge all the way.
Also. imo again. i like a lot of static enemies which are impossible for me and getting a sense of reward when i finally manage and beat them. Even if this undermines the open world concept a bit. I don't even think it undermines it tbh - not to be able to visit everything at the start is rational, and does not make it any less open world for me. NOT talking about zoned areas. But static enemies which allow you to explore the world - they just don't allow you to fully explore every single cave and treasure at level 1.