Yes. George R.R. Martin has given permission for this MUSH to be based off his intellectual property. It is also the only MUSH that he has authorized. See the following two quotes from e-mails sent by George R.R. Martin to Elio M. García and Linda Antonsson:
Regarding the approval:
“Also, after I consulted all my advisors, my agents and my editors and the like, I still did not know what to tell you about the Seven Kingdoms MUSH. Essentially my advisors told me that it was my call, that it is a complicated area, that there are certain dangers here but that others have done it without ill effects. I found myself wavering back and forth.
Hell, I =still= have my doubts. However, I do not like to discourage my fans, and you two have been both enthusiastic and patient. So I’m going to say, go ahead.”
Regarding Blood of Dragons being the only approved game:
“I continue to get emails from other ardent fans, asking my permission to base a internet MUSH or MUD on A Song of Ice and Fire. For a while, I would decline, and point them toward you and your site as the only authorized MUSH although I fear the last half dozen or so requests are simply sitting in my queue of unanswered emails (about six hundred and fifty of those at present—I had down to five hundred, but then I went away to Prague).”
Should there remain any doubts about Mr. Martin being aware of and approving of the MUSH, please note that he provides a link to it on his official site.