For in that sleep of death what dreams may come.

[Gordis]

Originally Posted by Mithadan

I think that it is the Barrow-Wight who is to blame for Merry's nightmare rather than the Downs themselves. Our four Hobbit friends were under its spell and were slumbering as they awaited their death. The Wights were not the shades of those buried at the Downs, but rather evil spirits who later came and inhabited the mounds. Laws and Customs of the Eldar makes specific mention of the fact that the unhoused fear of Elves at times become anchored to particular places. So the Wights may be such spirits perhaps sent there by Sauron or the Witch King. Clearly evil, we can assume the Wight delighted in tormenting his victims. The dreams are likely a form of such torment, communicated to his victims by osanwe.

I don't think the Wight is to blame for Merry's vivid dream.
Firstly the dream happened after the Wight had already been chased away by Tom.
Secondly the WK sent the Wights from Angmar to inhabit the Barrows after the Plague of 1636, while the fighting Merry dreamed of and the fall of the Last Prince of Cardolan happened in 1409 - more than 200 years before the coming of the wights. By this time, the fear of the buried Dunedain would be long gone to Mandos. So how would the Wight itself learn the details of the fighting?