Manar Ahmed Kamal GCS shows the total number of citations to a paper in the Web of Science Core Collection. So institution with the highest citation will come first. Moreover, which institutions you want to include depends on the sample you have selected for bibliometric mapping. If institution 1 fits the sample criteria, you should include it, otherwise not.

As per my knowledge, there is no need to merge any variable.

To your first question:

We generally write institutions/organizations as many papers are from practitioners who are affiliation to some organization and not an academic institution. Thus, both of them will be included in the list for sure.