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The term "Middle-earth" was not invented by Tolkien, it is English for Old Norse Midgard and meant the world of men in the mythological universe of the Germanic people. Middangeard occurs, for instance, half a dozen times in Beowulf, which J. R. R. Tolkien translated and worked much on it as a scholar (Also see J. R. R. Tolkien on discussion of his inspirations and sources). See Midgard and Norse mythology for the older use.
J. R. R. Tolkien was also inspired by this fragment:
The name was consciously used by J. R. R. Tolkien to locate The Hobbit, The Lord of the Rings, The Silmarillion, and related writings. Tolkien's great mythological tales of Middle-earth are meant to be taken, fictitiously, as an ancient history of the Earth, particularly of Europe, from several thousand years before the lands took their present shape.
Although 'Middle-earth' strictly refers to a specific continent (called Endor in Elvish), representing what we know as Eurasia and Africa, the term is sometimes used to refer to this entire 'earth' (properly called Arda). This because Aman was removed from Arda, and the Eastlands were unknown, and thus 'Middle-earth' was the only known part of the world.
Tolkien wrote extensively about the linguistics, mythology and history of the land, which form the back-story for these stories. Most of these writings, with the exception of The Hobbit and The Lord of the Rings, were edited and published posthumously by his son Christopher. Notable among them are the multiple volumes of The History of Middle-earth, which describes a larger cosmology which includes Middle-earth as well as Valinor, Númenor, and other lands.
A note on "truth" and canon
It is remarkably difficult to speak of what is true in the context of Middle-earth, perhaps more so than for any other fictional world, such as Greek mythology. The reasons for this are three:
Tolkien's writing is laden with details and hints, which sometimes tend to be contradictory, especially in the posthumously published work. This information cannot be trusted against explicit statements elsewhere, but they do add confusion. In general, the revised versions of The Hobbit and the Lord of the Rings are considered canon, but with The Silmarillion the matter is more complex.
To add to the confusion, in some cases, Tolkien intentionally wrote inconsistencies into his works. For instance, Tom Bombadil simply does not fit into Middle-earth cosmology. In a letter, Tolkien said that any good mythological system—which Middle-earth is—needs a certain amount of mystery.

What follows is a brief listing of characters from Tolkien's work which lived in Middle-earth. Note that characters are sorted according to several groups, and may appear multiple times.
House of Finwë
Kings of Númenor: see Kings of Númenor
Ringwraiths or Nazgûl
Thorin and Company
Kings of Arnor: see Kings of Arnor
Kings of Arthedain: see Kings of Arthedain
Chiefs of the Rangers of Arnor: see Chiefs of the Dúnedain
Stewards of Gondor: see Steward of Gondor
Kings of Rohan: see Kings of Rohan
Wizards or Istari:
The stories takes mostly place in Beleriand, Eriador, and Rhovanion, but there are many other places in Middle-earth.
See also Aman, Númenor for places outside Middle-earth.
First Age only:
Middle-earth was carefully designed by Tolkien, and contains many natural features such as rivers, mountains, seas, etc..
First Age only:
Present after the First Age:
First Age only:
The works of Tolkien have been a major influence on role-playing games along with others such as Robert E. Howard, Fritz Leiber, H.P. Lovecraft and Michael Moorcock. Although the most famous game to be inspired partially by the setting was Dungeons & Dragons, there have been two specifically Middle-earth based and licensed games.
These are the Lord of the Rings Roleplaying Game from Decipher Inc and the Middle Earth Role Play game (MERP) from Iron Crown Enterprises.
Simulations Publications created three war games based on Tolkien's work. War of the Ring covered most of the events in the Lord of the Rings trilogy. Gondor focused on the battle of Pelennor Fields, and Sauron covered the Second Age battle before the gates of Mordor.
The computer game Angband is a free roguelike D&D-style game that features many characters from Tolkien's works.
Cosmology
Historical periods
Characters
First Age
Descendants of Idril and Tuor
Haladin of Brethil
Others
For a list of the Valar, see that article.Second Age
Third Age
The Fellowship of the Ring
Kings of Gondor: see Kings of Gondor
Other characters
Races
Places
Nations and large regions
Present after the First Age:
See also Regions of Gondor, Realms of Arda.Natural features
Large waters
Mountains and Hills
Rivers
Cities, fortresses and other populated places
See also Cities of GondorMajor languages
Items
Weapons
Unions
Battles
Timeline
See Timeline of Middle-earth.Games
Role-playing Games
War Games
Computer Games
External Links
References