Well, we saw the tiny Type 1 hand phaser vaporize targets in TNG (say, Q's "animal thing" Napoleonic soldiers), and its settings supposedly only went up to 8 (or at least there were eight indicator lights in the row).
We also saw the eight-light setting of a Type 2 phaser vaporize Yuta in "The Vengeance Factor".
Basically, then, onscreen events aren't in conflict with what the TNG Tech Manual says, as listed by MacLeod
. And although we never quite witnessed setting 16 doing as much damage as the Manual promises (it just drilled a hole in rock in "Chain of Command I"), at least it was claimed
to level entire buildings in "Frame of Mind", in accordance with the Tech Man.