Merlin is a special unit in Stronghold Legends and only available to those users who are currently playing as the Arthur faction. He is recruited from The Round Table, costs nothing in gold and only 200 Honour. You can find out ways to generate Honour in the game here.
Merlin is a fairly slow moving unit, but has tremendous advantages when fighting against enemy units. Using his staff, he can "zap" enemy units with lightning within a certain distance of his location, which makes him extremely useful on defensive locations in your castle such as walls or towers.
In melee combat however, Merlin is virtually useless and will easily get overwhelmed or defeated giving very little damage in return.
It's therefore extremely important to protect him well to prevent this from happening, particularly if the enemy is playing as a different faction with access to more advanced units and magical powers, as most of these are not limited. Note that the range of Merlin is also shorter than the range of Archers- this means that you must ensure he is well protected if you use him on the ground.
You can only have one Merlin unit at any time. If he is killed, you will instantly be able to purchase another Merlin unit from The Round Table again. Like all ground units from The Round Table, Merlin has a special power, in his case called The Dragon's Breath.
You can activate this special power by left-clicking on the lightning bolt icon on the right side of your screen, and right clicking on the map where to use it, obliterating all enemies within its circumference. It can only be used somewhere within Merlin's range already, and once used, it will require a "recharge" time. During this, the green line around the outside of the lightning bolt icon on your screen must reach all the way around to the start before it can be used again.
This icon is only available while Merlin is alive, so if Merlin dies or you have not yet recruited him, you must recruit another Merlin from The Round Table again in order to use it. Only he has the ability to use this power.