Caroline Myss takes a Jungian view to see Merlin as a useful "archetype" people can identify with sometimes:
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If there was a historical person named Merlin, he was probably a Druid associated with a Mystery tradition related to King Arthur... some tarot enthusiasts are into this... It's nice because it gives Western culture its own authentic mystical tradition... and the knights were the exemplars of this. Probably Wiccans know more about it...