1. When in struts flow form beans are populated and who does it?
They are populated before your action is called (not sure exactly when). Its the responsibility of struts to set its values (not sure exactly how, its done using interceptors in struts 2, must be a similar approach in struts 1 too)
2. As because form beans sole responsibility is to get and set data can we merge it with Action class ?
I'm not sure if this can be done in struts 1 (easy to do in struts 2). Try to make the action as a form bean declaration in your struts-config file. Still you'll have to use the FormBean object passed as parameter to the action. You can't use properties of your action in JSPs directly...