User blog comment:MerlinUSA/Lies My Dragon Told Me/@comment-5102537-20130130003215/@comment-5102537-20130130172718

Kilgharrah was referring to the person that Arthur truly loves, not Gwen.

''KILGHARRAH Patience, young warlock. The solution lies in a force greater than you or I can understand, a force that has puzzled many minds...

MERLIN Please, I have very little time.

KILGHARRAH ...a force...

MERLIN Just tell me!

[Kilgharrah laughs some more.]

Why, it is the greatest force of all: love.

MERLIN Love?

KILGHARRAH You must find the person Arthur truly loves.

MERLIN And then what?

KILGHARRAH One kiss from her will break the enchantment, and he will desire Vivian no more.''

--

So Kilgharrah's comment was clear, even more so when Merlin later talked to Gwen:

--

''MERLIN Everything. Anyone who spends five minutes with you can see how you feel about each other. Look, I do not have a lot of time to explain, so you are gonna have to trust me. Arthur does love you. GWEN No he doesn't.

MERLIN If you don't trust me, trust your feelings.

GWEN (scoff) I'm never trusting my feelings again.

MERLIN He's enchanted!

GWEN Yes, with Lady Vivian! I can see that!

MERLIN No, I mean literally enchanted with magic, potions, love juice! None of his feelings are genuine!

GWEN How can you be sure? When I saw him, his feelings seemed real enough.

MERLIN Gwen, none of his feelings for Vivian are real. But if you do not break the spell, his death will be. '''Search your heart. You know who he loves.'

Ah, I think I see what you mean by the dragon can't read human minds. If I understand you correctly, you wonder how Kilgharrah could know that Arthur loves Gwen? Yes, that's a mystery. I've always assumed that Gwen was part of the prophecy and that was why the dragon knew about it. Probably.