Quote Originally Posted by Animeniax View Post
From the Governor's view, it's very plausible that Merle is a traitor. He talked about his brother a lot, then his brother appears as part of an attack that results in the Gov's daughter dying and him losing an eye.
Merle also lied and told the Governor that Michonne was dead, and because Michonne lived she was able to get to Ricks group and lead them back to Woodbury.

Take all that and add the fact Daryl was in the attacking group, it would be hard NOT to think Merle was a traitor :P