maybe this is what you want
import pandas as pd
idx = pd.MultiIndex.from_product([['state1','state2'], ['county1','county2','county3','county4']])
df = pd.DataFrame({'pop': [12,15,65,42,78,67,55,31]}, index=idx)
pop state1 county1 12 county2 15 county3 65 county4 42 state2 county1 78 county2 67 county3 55 county4 31
df.groupby(level=0, group_keys=False).apply(lambda x: x.sort_values('pop', ascending=False)).groupby(level=0).head(3)
> Out[29]:
pop
state1 county3 65
county4 42
county2 15
state2 county1 78
county2 67
county3 55