Merlin, far from being the bearded, backwards wizard that T.H. White's The Sword in the Stone portrays him to be, begins the series as a young warlock recently arrived in Camelot, where magic is banned on pain of death. His powers are innate, not learned, but at the start of Season 1 he has no experience and no guidance, and no idea of how he is to use his magic (which is where Gaius and the Great Dragon come in). He is kindhearted and brave, if clumsy and awkward, and wants only to use magic for good.
"Without you, Arthur will never succeed. Without you, there will be no Albion!" (The Dragon's Call, Season 1 - The Great Dragon to Merlin.)Arthur, Uther's son, has been brought up to hate sorcery and to regard all who practice magic as corrupt. He is proud and stubborn and an arrogant pig, as Gwen calls him - traits which he no doubt inherited from his father and then skilfully developed on his own; but early on his character begins to grow, showing viewers that he is more than that. He is compassionate and has a deep love for the people of Camelot, and is not quite so bull-headed in his approach to magic as Uther.
"You're a prat, and a royal one." (Le Morte d'Arthur, Season 1 - Merlin to Arthur.)
"You're a better man than your father. Always were." (To Kill the King, Season 1 - Morgana to Arthur.)The complete overhaul of Arthur's and Merlin's established characters is what makes them both three-dimensional and allows the series to stand out as something new. If Merlin's powers were all in place by Episode 1 - if he were the wise wizard he is generally made to be - there would be no development. If Arthur were the glorious King Arthur at the beginning of the series, rather than being the jerk throwing knives at a servant, he would be flat and stale and unable to grow episode by episode.
As it is, the distinct flaws in each leave plenty of room for development: Merlin must learn to listen to his head and not always follow his instincts, and Arthur must lay aside his inbred fear of magic and his arrogance. Little by little both characters are growing, moving, hopefully, toward the crisis - when Arthur at last learns about Merlin's magic. Every episode edges a little nearer to that time, increasing the tension as Merlin is torn between keeping his powers a secret and revealing who he really is, and as Arthur begins to question his father's attitude toward magic.
An interesting facet of Merlin is the skill with which the characters play off each other, and that is most apparent in Arthur and Merlin - perhaps due as much to the actors as to the screenwriters. Like Morgana and Gwen's friendship, which is set more in the background, that of Merlin and Arthur is one between opposites, both in nature and position. By starting them on a footing of mutual disgust in the first episode, the screenwriters are then able to build up from the ground, letting the episodes add to the respect and friendship piece by piece. Arthur progresses from beating Merlin up with a broomstick to drinking poison for him; Merlin goes from insisting that if anyone wanted to kill Arthur, he would lend them a hand, to sacrificing his life to save the young Pendragon's. This will also (again, hopefully) set the stage for Arthur to realize that Merlin is not an idiot, and that he has powers far beyond what Arthur would have previously imagined.
It also gives the series a taste of humor and irony, at least in these episodes before Merlin's powers are revealed, as Arthur prides himself on his own skill and Merlin allows him to do so. An interesting episode in Season 2 put Arthur in Merlin's shoes for a time as he watches another man get the glory for his own actions - in exactly the same manner that Merlin has to let others take the credit for winning battles and saving Arthur's life. Hopefully the screenwriters will not stretch this too thin over episode after episode of Merlin disguising his magic, for, just as with a story in which a single point is worn to shreds by being carried too far, it will weaken the story if the truth does not soon come out.
"You cannot do this alone! You are but one side of a coin, and Arthur is the other." (The Mark of Nimueh, Season 1 - The Great Dragon to Merlin.)