"to blend together, merge, unite" (intransitive), by 1910, of uncertain origin. OED suggests "perh. a blend of MELT v.1 and WELD v." Said elsewhere to be a verb use of melled "mingled, blended," past participle of dialectal mell "to mingle, mix, combine, blend."
But it is perhaps an image from card-playing, where the verb meld is attested by 1907 in a sense of "combine two cards for a score:"
The rise of the general sense of the word in English coincides with the craze for canasta, in which melding figures. The card-playing sense is said to be "apparently" from German melden "make known, announce," from Old High German meldon, from Proto-Germanic *meldojan (cf. Old English meldian "to declare, tell, display, proclaim"), and the notion is of "declaring" the combination of cards. Related: Melded; melding.