Merry is an adjective meaning cheerful and lively, especially when celebrating something.
The most common usage is in the phrase "Merry Christmas", wishing someone a happy Christmas celebration.
Other meanings of merry include:
1. Slightly drunk or tipsy ("He got merry after two glasses of wine")
2. Pleasant and enjoyable ("We had a merry time at the party")
3. In old English, it could mean pleasing to the eye ("a merry sight")