Azura created the Khajiit? This is such crap.

Xaramasa

During the Dawn Era, Meridia was known as Merid-Nunda, an Aedra. After Lorkhan's true intentions were discovered, Merid-Nunda fled Mundus along with Magnus and became one of the Magna Ge. After consorting with Daedra, Merid-Nunda was cast down, and in turn became the Daedric Prince Meridia.

"Cast down" is such a strange word to describe Meridia becoming a Daedra considering the princes aren't spirits who gave up their powers/life force in the creation of Nirn.

The Magna-Ge were Magnus' children who had a hand in creating the world, so presumably they were filtering some of their power into Nirn until Magnus quit halfway.

If anything, the process of Meridia turning into a Daedra was more of an elevation and she seems to be one of the more powerful daedric princes. She literally created her own realm and dimension by bending the light of Magnus and has a pocket realm in Coldharbour that Molag Bal cannot affect despite it being his own realm where he's supposedly omniscient and omnipotent in.