It might be odd to have mermaids moving on land, although I guess they could use magic to do so. If they are mermaid spell casters, they should be able to swim in the water (i.e.,start with water walking). I thought that the sea people (be they mermaids/mermen/"people of the mer" in the typical sense or something quite different) had gone extinct before Danalin began to dream
If they aren't mermaids but half-snakes as zxcvbnm suggested they might be (and since they have no fins) then they probably fit better with the Kuriotates. Their pronunciation of the letter "s" is already stated to be a snake-like hiss.
If they aren't mermaids, you might consider adding mermaids also, but probably not as a Kurio unit. Perhaps as a hero, possibly tied to random events rather than built? I was actually just thinking that if alignment were changed by actions rather than simply by religion conversions, thenmermaids would make a very good OO unit that requires a Good alignment. It could be that some of Danalin's dreams haven't been quite so corrupted by Mammon, so he is remembering his old favorite race, and bringing them back.