Vanilla already merges item entities lying on the ground, but only within a ~0.5 block radius and only up to the normal stack size limit. On item-heavy farms or other situations (Broken or full Create mod farms for example) that's not enough - piles scatter past that radius and spawn faster than vanilla can clean them up, leaving hundreds or thousands of separate item entities ticking on the server and that can destroy server in 1 night if chunk loaded farm will fill up or break.
ItemMerge periodically sweeps each loaded world and merges matching item stacks over a much wider radius, and lets a single pile grow past the item's normal stack size (can be turned off for different stack types) so a farm's output collapses into a handful of entities instead of thousands.
The mod is highly configurable.
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