Short answers, pulled from the story.
Merit, or puñña, is a beneficial and protective force that Buddhist ethics considers fundamental, produced by good deeds, words, or thoughts. It improves circumstances in this life and determines the quality of a person's next rebirth, contributing to their progress toward enlightenment.
Buddhists make merit through three bases: giving, cultivating virtue, and mental development, with giving considered the easiest of the three. Later commentarial texts expand this into ten deeds, including honoring others, rejoicing in others' merit, and listening to the Buddha's teachings.
The field of merit is the idea that good deeds done toward certain recipients yield more merit than the same deeds done toward others, much like a seed planted in fertile ground. The Sangha is described as the primary field of merit, and saṅghadāna, giving to the whole community, is said to yield even more fruit than a gift to the person of the Buddha.
Buddhists transfer merit to deceased relatives to help them cross safely into their next rebirth. The transfer is done through a mental wish and does not reduce the merit of the giver, much like lighting one candle from another.
Merit legitimated kingship because rulers were expected to embody the Cakkavatti, or wheel-turning monarch, who earns sovereignty through spiritual merit rather than inheritance alone. Sri Lankan kings acted as lay protectors of the Sangha from the tenth century CE onward, and Thai kings did the same during the Sukhothai and Ayutthaya periods.
Merit release is a ritual of freeing captive animals, often fish and birds, as a way of making merit, traced in part to the Mahāyāna Humane King Sutra. It has drawn criticism from wildlife conservationists because studies in Cambodia, Hong Kong, and Taiwan found it can kill many released animals and create a black market for wildlife.