From a deleted thread at asoiaf (just because):

Merlings, what are they? In the world of Westeros they almost certainly exist. Why don't we see them? They prefer to remain hidden.

LF has a ship named "The Merling King". This indicates that LF has some special knowledge of Merlings. LF comes from seagoing ancestry out of Braavos, and has been sailing around the coasts and rivers of Westeros all his life. And LF, being LF, would certainly try to get some advantage out of whatever he learned.

So is there anyone LF claimed to have a special control over? Yes there is. LF claimed, very colorfully, to have Varys under his control. And Varys is the most obvious candidate for merling, if they do exist. So LF doesnt tell Varys little secret, and Varys in turn doesnt tell what he knows about LF.

People see what they expect to see. So when confronted with Varys abnormally large size, they think "fat man". And when they see no obvious external sexual bulge, they think "eunuch". Varys cleverly lets them think so. He clearly has no sexual interest in human females. Perhaps he has another kind of interest? He did lick his lips when the subject came up once... (Don't be so squeamish, its like a fish dinner would be to us.)

Anything else on Varys? Plenty. He told Tyrion that being thrown overboard wouldnt bother him, but that Tyrion would be surprised at the result. There is no bed in Varys quarters. If he is a merling, then we can probably guess where he does sleep.

We were also told several times that Varys has a peculiar smile, a "slimy smile". I interpret this to mean that Varys probably doesnt show his teeth when smiling. And that would be because there is something odd about his teeth...

Another probable Merling, who does show his teeth, because he is an idiot, is a large vicious "man" named Biter. The idea that this barely sentient being sat around and filed all his teeth just to scare people is absurd. Biter's teeth are naturally pointed. Natural for the fish people. (I hope someone does finally throw Biter in the ocean one day...)

Illyrio the enormous magister, is Varys co-conspirator, and is probably of the same species. We see these two plotting about controlling the people around them, and also about controlling Varys "little birds". It is natural for the Merlings to associate these subjects, humans and birds are, after all, just two lower species to them.

From their one meeting, it appears that the Merlings are experts at manipulating the humans in secret. And also there is a hint these two have plenty of patience, they seem to be comfortable waiting years for their plans to bear fruit. Perhaps Merlings are like carp and just continue to get larger as they age? This would mean that Varys and Illyrio are quite long-lived by human standards.

Unfortunately this makes the riddle of Varys "little birds" even harder to solve. A non human might indeed chop up little kids for his own purposes, and think no more of it than you would think of chopping up a fish. Equally the Merlings expertise at controlling lesser species could include actual birds, which they could make do tricks a human wouldnt even dream of. The answer probably boils down to which species is easier for a Merling to use for the purpose.....

Amphibious Merlings such as Varys and Illyrio would have no trouble entering and leaving the keep whenever they wanted, unseen and unsuspected by humans. The same applies to any castle in any coastal town. Due to their size these two are probably at the limit for "passing" as humans. This does not rule out the possibility of larger, older merlings, deep in the ocean...

My fourth Merling for your consideration is Sir Mandon Moore. What? He is either of a variant species, a river type, or is simply much younger, and therefore smaller, than the other three already mentioned. Mandon Moore is referred to repeatedly as having dead eyes or fish eyes, and of having "no life but duty". Which makes him a bit of a cold fish . Incidentally if Moore is a Merling, his attempt to murder Tyrion during the battle of the Blackwater is seen in a new light. Consider what Tyrion had just done. He had used Wildfire and set the entire Blackwater to burning. Can you think of anything else that would get a fish man angry enough to "break cover" and try to kill? The surprise here is that if Mandon Moore is a Merling, then when Pod pushed him over the side, he didnt drown but merely swam away. Perhaps that is why he didnt scream when he was pushed... expect Moore to reappear later in the series. 

What other tricks could the Merling species pull on the humans to control them? How about giving them a religion? I refer here to the Drowned God. Very handy to have a large group of humans willing to do anything for you, and it provides a ready source of spies in places of power, such as Patchface, who often tells riddles about life under the sea.