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Merlin is a popular character featured in hundreds of books, films, and games. He is a wizard, and is often depicted as the most powerful living wizard in whatever scenario he is in, whether it relates to the Arthurian Cycle or not.
He fills the role of the "sage" archetype in the Arthurian legends. He helps young Arthur become king and counsels him throughout his reign, either out of service to prophecy, sympathy for Arthur, a desire to unite England, or other more mysterious motives, depending on the story in question.
He is sometimes shown as a background character, sometimes as bumbling, and sometimes as sinister. His most prominent powers are the ability to change shape and to see the future. Though originally pagan, later sources have him convert to Christianity. Merlin was ultimately killed or imprisoned forever, either by the Lady of the Lake, Morgan le Fay, or Nineve, depending again on the story.
In Master of Magic, Merlin is a great wizard who specializes in both nature and life magic (having five spell ranks in each of these areas). Merlin is also a sage (special ability of Sage Master), which tremendously increases the speed with which he researches (and learns) new spells.