From the man page on git-merge, there are a number of merge strategies you can use.
resolve - This can only resolve two heads (i.e. the current branch and another branch you pulled from) using 3-way merge algorithm. It tries to carefully detect criss-cross merge ambiguities and is considered generally safe and fast.
recursive - This can only resolve two heads using 3-way merge algorithm. When there are more than one common ancestors that can be used for 3-way merge, it creates a merged tree of the common ancestors and uses that as the reference tree for the 3-way merge. This has been reported to result in fewer merge conflicts without causing mis-merges by tests done on actual merge commits taken from Linux 2.6 kernel development history. Additionally this can detect and handle merges involving renames. This is the default merge strategy when pulling or merging one branch.
octopus - This resolves more than two-head case, but refuses to do complex merge that needs manual resolution. It is primarily meant to be used for bundling topic branch heads together. This is the default merge strategy when pulling or merging more than one branches.
ours - This resolves any number of heads, but the result of the merge is always the current branch head. It is meant to be used to supersede old development history of side branches.
subtree - This is a modified recursive strategy. When merging trees A and B, if B corresponds to a subtree of A, B is first adjusted to match the tree structure of A, instead of reading the trees at the same level. This adjustment is also done to the common ancestor tree.
When should I specify something different than the default? What scenarios are each best for?