This is an Al Stewart/Peter White composition. In the liner notes to 24 Carrots, Al writes that this Merlin isn't the one you're probably thinking about - Merlin the Magician at the Court of the legendary King Arthur - but "the Scottish Warrior poet who appears in Robin Williamson's Five Denials On Merlin's Grave."
This is a down tempo, acoustic number showing Al in dreamy mood, reflecting on what it would have been like to have lived in a bygone age.
"Merlin's Time" was released as the B-Sides of both "Running Man" and "Mondo Sinistro."
Suggestion credit: Alexander Baron - London, England, for above 3