Can mercon III it be substituted for dexron III?

Dexron III/Mercon automotive transmission fluid (ATF) is generally recommended as a replacement fluid for automatic transmissions meeting original equipment manufacturers (O.E.M.) performance...

petroleum based fluid for automatic and powershift transmissions

yes

III is the Roman numeral for 3, so that would mean it's "Iron 3", which means the iron ion has a charge of 3+.

Yes.Dexron III/Mercon automotive transmission fluid (ATF) is generally recommended as a replacement fluid for automatic transmissions meeting original equipment manufacturers (O.E.M.) performance...