The document(s) could not be merged. The required application may not be installed properly, or the template for this document ...

The document(s) could not be merged.
The required application may not be installed properly, or the template for this document library cannot be opened.

Please try the following:
1. Check the General Settings for this document library for the name of the template, and install the application necessary for opening the template. If the application was set to install on first use, run the application and then try creating a new document again.

2.  If you have permission to modify this document library, go to General Settings for the library and configure a new template.