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Mergrave was a doctor in the city Castrovalva. Like all residents of the city, he wasn't real, but rather a block transfer computation creation of the Master.
He was also a hunter who followed the rituals of his planet. After the Fifth Doctor explained to him that Castrovalva was folding in on itself on purpose, he helped the Doctor to see the Portreeve.
When he was told to investigate a smashed window on the upper floor, he found the Doctor. He explained that Portreeve was in fact the Master. Mergrave sacrified his life to keep the Master trapped in a doomed Castrovalva. (DW: Castrovalva)