The primary difference is that Merino wool comes from Merino sheep. As for what makes the wool special, it appears to be the size of the fiber itself. The USDA has specifications for wool grades based on the size of the fiber, and Merino wool fibers range in size from <18 microns to 26 microns; for reference, a human hair ranges in size from about 50 - 100 microns. That puts all of Merino wool at grade 62 or better. Because it’s a finer fiber, each individual strand is more flexible, which makes it less scratchy. The flip side of that is that a lighter fiber means that it’s also less strong, so Merino isn’t well suited to outerwear that’s going to be used in more austere environments. Wool in general doesn’t have very good abrasion resistance, and a very light fiber will be much less so.

Any wool base layer made from sheep’s wool should keep up just fine, but a coarser wool is going to feel less comfortable against your skin. I have an old Army milsurp sweater, and the wool is very coarse; most people would not find it comfortable on their skin.

IIRC the key difference is that it’s smoother/softer and doesn’t feel itchy. I only own merino wool stuff though and can’t remember last time I wore regular wool, so not sure of other differences.

Bought a bunch of long sleeve shirts from Costco (like 15ish?) when they were cheap, as low as $6 per shirt as well as their Kirkland socks (for women, men’s are garbage) so some good deals can still be had there on certain products.

Only saw 50% merino wool/synthetic mix base layers though for sale there, but I know Ice breaker can occasionally have decent sales, but their prices have gone up over the years and quality down a bit since they move production out of NZ.

Edit: I think I first saw the shirts in UK, but only bought them in Canada and they’re made in Canada. They’ve doubled in price (non sale) in the last 3-4 years, but still cheaper than anywhere else and could be used as base layer.