Grail Quest Solo Fantasy/WMG

"Pip" is an artifical homunculus controlled via the the player's mind.
Merlin could create a being capable of sword and sorcery; even one that can bond with a copy of Excalibur; sure. However, the problem with homunculi is that they're difficult to maintain; especially mentally. Specifically,


 * 1) It's difficult to have a stable personality at all; and not result in a Golem situation where they just try to kill everyone.
 * 2) Constructed personalities break down; especially if you tell them you can only keep them alive for a limited time.
 * 3) They tend to want the same rights as regular human beings.

Merlin's solution was to create the body; and then summon a mind from elsewhere. Yours. He hired Freeman John and Goodwife Miriam (and Mean Jake) in the first book with a few gold coins (which is a LOT of money to peasants) to give some backstory so the mind summoned didn't get too freaked out. After the mission is over; he sends your mind back to it's own time, and the homunculus winds down and dies. After it turned out that the mind summoned was amazingly loyal and didn't ask questions, he stopped bothering with a setting, and recreates the homunculus (with materials from the old one so there's Old Save Bonus) and steers it the direction it needs to go.
 * Supported by the fact that apparently Merlin was experimenting with Pip's body with reanimation in between books 4 and 5.