-The anti-merger rule is meant to preclude peaceful merger. There is nothing peaceful about the current situation. Lords of Terran are being thoroughly beaten, and they try to find a way to keep their lands. I think that's entirely legit.
It would be different if d'hara was at war with Terran. As far as I know D'Hara has taken no sides in this. If D'Hara was beating them then it would be legit, but they are not, Phantaria and Farronite are the ones beating them.