This is not the usual spelling in any of the Scandinavian languages (in Sweden and Denmark it is Freja and in Norway it is Frøja) but it is the common spelling of the goddess's name in English. In the 2000s it became popular in Britain.
Geoffrey based parts of Merlin's character on Myrddin Wyllt, a legendary madman and prophet who lived in the Caledonian Forest. Other parts of his life were based on that of the historical 5th-century Romano-British military leader Ambrosius Aurelianus (also known as Emrys Wledig). In Geoffrey's version of the tales and later embellishments Merlin is a magician and counselor for King Arthur.
As an English name, it became popular due to the Fleetwood Mac song Rhiannon (1976), especially in the United Kingdom and Australia.