Flatten / merge
Merge combines several layers into one, while Flatten Image flattens all layers into a single background layer. After that the individual layers can no longer be edited separately. It makes your file smaller but less flexible.
Use Merge Layers to clean up a few finished layers when you are sure you no longer need them separately. If you want to keep editing on a combined image without losing the individual layers, make a stamp-visible layer with Ctrl+Shift+Alt+E. Always keep a layered version as a PSD before you flatten. Tip: only flatten at the very end, just before exporting.
Related terms
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The presets on this site set these adjustments up for you as a starting point, which you then fine-tune to taste.