WARNING: The following contains spoilers for The Seven Deadly Sins: Dragon's Judgment Part 2, now streaming on Netflix.
Just when it looked like things were wrapping up on The Seven Deadly Sins, the series throws one more "forget everything you think you know" moment at Meliodas and the rest of the Sins. After the death of the Demon King, Merlin reveals that the table is finally set for her to unleash Chaos. The ultimate entity in The Seven Deadly Sins' universe, Chaos is the force that created all of existence. Let's go over what we know about this new player that turns the entire series on its head right at the end.
Chaos is a will, a primordial force that has no physical form because it is not a physical being. It created the Demon King, Supreme Deity, The Sacred Tree of the Fairy Forest, the Giant Clan and the Human Race. Chaos is said to possess darkness that even the Demon King fears, and light that even the Supreme Deity worships. While the Demon King and Supreme Deity each created their own clans, Chaos continued its own creation, much to the gods' concern, considering Chaos was unsatisfied with their races.
When Chaos created humans, they quickly became its favorite form of life, because they are the best embodiment of Chaos itself. Humans have the capacity for good and evil, love and hate, forgiveness and sin. The Giant clan is too barbaric for Chaos, while the Demon and Goddess Clans aren't its creations and don't fit the mold of life that Chaos sought for eons and found in humans. Jealous of humans and concerned for their own safety in the face of Chaos' favored creations, the Demon King and Supreme Deity agreed to seal Chaos away forever.
Chaos was too powerful for the gods to seal very effectively. The best they could do was imprison Chaos in a mossy golem that resembled a giant, green pig -- the very one that the Seven Deadly Sins eventually built a bar on and named Hawk Mama. Even while imprisoned, Chaos created Lake Salisbury and the Priestess of the Lake in preparation for its eventual release. However, Chaos could not be released until either the Demon King or Supreme Deity were killed, which would throw the world out of balance to the extent that Chaos could be freed.
As Merlin orchestrated, the conditions to release Chaos were met, and the Priestess of the Lake resurrected Arthur Pendragon as the King of Chaos, as only a human of its choosing could wield such power. Chaos chose to co-exist with Arthur, effectively making him the most powerful being in The Seven Deadly Sins' universe, able to bend reality to his will. Arthur was able to easily overcome the attack of Cath Palug, revealed to be an amalgam of Chaos' destructive power, and now wields the full power of Chaos.
Ultimately, the reveal of Chaos and its joining with Arthur is pretty inconsequential for a human being resurrected as the god of everything. Arthur only intends to use his power to create a new kingdom of eternal peace in Britannia and appears to have no ambitions for the universal scale of Chaos' full power. Considering that a stray thought of Arthur's turned all of reality into a series of monsters trying to kill Meliodas, one can only hope he's got a full grasp on his new power.