I don't actually use Git, but I think this would work for your case:
Use something like what's specified here: https://gist.github.com/564416
git checkout master
git merge --no-commit --no-ff development
git reset -- /path/to/folder # revert updates from path
git commit
Again, I don't use git, I am just deferring to how I think things work based on my experience with TryGit.
- checkout master
- merge, but don't commit, no fast forward.
- merges are now staged, so reset that entire directory tree
- commit
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