Hi John,
"Merge Lands" is used to combine multiple nearby lands (each with its own flag) into a bigger land with only one flag.
The land borders have to be adjacent for that to happen and you will usually know that it's the case when one of the lands stops upgrading and prompts you to merge it with a nearby land instead.
However, your bases (from the list in "My Lands" tab) represent individual "counties" with a 100km radius and cannot be merged. Bases operate independently from each other and have their own command centres, warehouses and other infrastructure.
I hope that helps!