The evidence indicates that as priest prophet and magician, Merlin was the incarnation of a god - or was held to have been such. He stood as heir to an extraordinarily rich and varied mythological tradition.
In the Welsh Triads, the first name that this Island bore, before it was taken or settled, was Merlin's Precinct. Clearly there was a time when Merlin was regarded as embodying in some respects the Isle of Britain.
Another tradition tells how Merlin acquired the Thirteen Treasure of the Isle of Britain - various objects possessing miraculous powers - and went with them to the Glass House, and there they remain forever. The Glass House is the Otherworld, and may be alluded to in the Welsh name Myrddin meaning 'fortress of the sea' - the island fortress of Britain herself - hemmed in by the transparent walls of the ocean.
Britain herself was identified at times with the Otherworld. As early as the sixth century there existed a belief in Brittany that the souls of the dead were wafted across the English Channel in unmanned boats. On the British shore they saw no-one but heard a voice name them all, one by one.
Like Shakespeare's John of Gaunt, it seems that the Britons of old may have regarded their Island as as 'this little world, this precious stone, set in the silver sea, which serves it the office of a wall'; in which case Myrddin was simply a homonym for Britain.
It is likely that the coastal perimeter of Britain was regarded as a magic defence, marking out the middle of a chaotic space, peopled with demons and phantoms; an enclosure, a place that was organised.
In the case of Britain, 'the fairest island in the world', it may be that it was looked upon as a particularly sacred place, a microcosm of the larger world.
In Merlin's day the Island of Britain was regarded as lying in a direct path of the axis mundi which linked the Nail of the Heavens (the Pole Star) to Earth and the Underworld beneath. Gildas, writing in the middle of the sixth century, opens his history by stating that Britain is 'poised in the divine balance which sustains the whole earth'.
Edited and paraphrased from pages 117-119 of The Quest for Merlin by Count Nikolai Tolstoy, 1985.