At the start of N2, nation merging was enabled. Now I believe it was disabled due to the fact that a majority of merges brought nothing other than the supperior nation eating the merging nation, and the nation that merged into the supperior nation, completetly dying out.
Merging was bassicly a way for the merging nations to escape responsibility and peacefully quit

But this has changed, and here are some examples of recently preformed, succesful merges
(these are pretty sizeable nations merging into each other, so pretty much valid examples)

- Russia and Japan --> Russo Japanese Empire | Both communities work well together and still play actively
- Australis and Siberium --> Eastern Syndicate | From personal experience, this merge has been really succesful and we've been working together really well
- MEU and Farastan --> Persian Empire | Quite a recent merge, but seems to be a merge for expansion, not for either of the two to quit the server

Yes, these merges were preformed without the merge plugin being enabled, so why does it even need to be enabled?
Well it's just alot easier for nations to merge that way. Some town mayors aren't always available to log on and they'll be nationless for a while, meaning they'll be taxed and lose on time to gain loyalties. And all the residents from the merging nation won't have their loyalties transfered to the supperior nation, which isn't fair
All towns of the merging nation being automaticly transfered to the supperior nation would solve that issue.