It has long been suspected that Merlyn and Merlin of Camelot was the same person. Captain Britain & MI-13 #3 makes it clear that Merlin indeed is one of Merlyns countless identities.
Major Story Arcs
When Mephisto goes to The Infinite Embassy to see what thee other Gods plan on doing about The Serpent he asked Merlyn but got no response it was at this point he noticed the absence of Red King.
Merlyn has many magical powers and has also trained himself so that he as developed other powers. He is possibly omniversal, though he can make duplicates of himself.
He is one of the greatest sorcerers in Earth's history.