Well, Merlino might not have been as influential as other mob bosses traditionally were, but he still wielded the sword.
What I mean by that is that a boss is the one soldier in a family who can kill anyone in that family without cause or explanation. Everyone else, from the Underboss and the Consigliere on down has to get permission and needs a valid excuse. Not the Boss. So that is a roving lion, and Merlino typified that in his lawless wild behavior.
Don't forget, his power probably stretched back to New York City. As long as he had the backing of the biggest bosses in NY, he wielded the sword out in Philly.
"For us, rubbin'out a Mustache was just like makin' way for a new building, like we was in the construction business."
