King of Avalon almost always has one or two seasonal events being active. At this time the Merlin's Medicine Event is one of them. This guide explains how the event works.
During the duration of the event you receive Moonblood Orchids when gathering resources. These Moonblood Orchids show up in your inventory where you can use them to get prizes. There is no reward for slaying monsters.
You do not have to do anything else as what you normally have to do anyway to get Moonblood Orchids, just send your troops out gathering whenever you are not using them for anything else. You get 14 Moonblood Orchids for fully depleting a lvl 7 tile and 12 for a lvl 6 tile. You do not get any Moonblood Orchids for gathering on an Alliance Resource Tile.
You get your prizes by selecting the Moonblood Orchids in your items and clicking Use. Prizes I have received include: Gold, 100 Lord EXP, 100 Dragon EXP, Intensity Crystal (I), 10 Assault/Guardian Power, 30m VIP, 10 VIP Points, 100 Dragon Spirit EXP, Dragon Spirit Recall, 1k Food/Wood, 50 Silver, Knucklebone, 5m Speed Up, Materials (Animal Hide, Horn, Fire Opal, Spider Silk, Soul Clay).
There is not much to it, just do what you normally do and collect the extra prizes. If you have any questions, or comments, let me know in the comment section.