The main use case is to merge several input files into one output file. To trigger that, check the Merge files option.

Merging needs a language that is used as an anchor for merging. That is the source language that will be merged. If you have unique entry id fields, you can also use a field for merging. You can leave this field empty, and a dialog will pop up later where you can select the merge language (or field). In fact, that is recommended, since it means you don't need to know the exact language name. That's especially true if you also merge languages.

A master termbase can be defined to preserve homonyms. See the page on Merging with a Master Termbase for details. Keep in mind that the master termbase is used when it is defined, even if you don't drag & drop it during conversion! That can lead to confusion when you just drag on termbase, and can't find the result. In that case, check if you have a master termbase defined: the output will always be under the name of the master.

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