input_dictionary = [{'name': 'kishore', 'playing': ['cricket',
    'basket ball']}, {'name': 'kishore', 'playing': ['volley ball',
    'cricket']}, {'name': 'kishore', 'playing': ['cricket', 'hockey']}, {
    'name': 'kishore', 'playing': ['volley ball']}, {'name': 'xyz',
    'playing': ['cricket']}]
import itertools
import operator
by_name = operator.itemgetter('name')
result = []
for name, grp in itertools.groupby(sorted(input_dictionary, key=by_name),
    key=by_name):
    playing = set(itertools.chain.from_iterable(x['playing'] for x in grp))
result.append({'name': name, 'playing': list(playing)})
print(result)
Merging list of dictionary in python