LotR -- Book 1 - Chapter 08 - Fog on the Barrow-Downs

[Lalwendë]

Merry's recollection of his dream is peculiar. Both the dream itself and the way he relates it. He appears to drop into a trance-like state, as though he had been hypnotised and something has triggered the trance again. This could be the truth of the matter, that the hobbits have been hypnotised in some way, whether by use of magic, incantation or even by the wight burning something which has given off soporific fumes as is possible if you look at what Frodo sees when he wakes up in the Barrow:

he noticed all at once that the darkness was slowly giving way: a pale greenish light was growing round him.

I think it is likely that Merry might have heard of "The men of Carn-Dum", after all, as Mithalwen says, he is a Bucklander, and he certainly seems to know about the Old Forest. If he had indeed been in a trance then this is interesting as half-heard tales and facts can often emerge during these altered states of mind.

There could also be something in this sentence, which is what happens after Frodo attacks the wight:

Frodo fell forward over Merry, and Merry's face felt cold.

Could Frodo's stumble have affected Merry's dream, in the way that thunderstorms at night often cause people to dream of explosions? But personally, I do prefer the more supernatural explanation!