|Spoiler Inside: Solution to Puzzle||SelectShow>|
Some letters can be thought of as being another letter plus one or more additional strokes.
Set 1 consists of those letters for which this is not the case and one or more letters are based on each of them.
Set 2 consists of those letters based on letters in set 1 but not if there is a closer letter. E is not in this set, because it can be derived from F (in set 2) which is closer than I (in set 1).
Set 3 consists of those letters based on letters in set 2.
Set 4 consists of those letters which are not based on other letters and which have no letters based on them.
Admittedly, this can get a bit tenuous. Is the middle part of an M, a V? I decided it is not.