The Shire is a small, but beautiful and fruitful land, beloved by it's inhabitants. Various agricultural goods were produced in the Shire, notable Pipe-Weed.
The Shire was quite densely populated in some areas, but it was open enough to allow large woodlands and wild areas. There were green, rolling hills and freshly tilled earth.
From the west to the east, the Shire measured 40 leagues, from the Far Downs to the Brandywine Bridge, and it measured 50 leagues from north to south. The total area is likely roughly 20,000 square miles.
In the year 32 of the Fourth Age, the area of Westmarch was given to the Shire as a gift by King Elessar of the Reunited Kingdom. It became an autonomous region inhabited by the Hobbits.
The inhabitants of the Shire are a queer race, known as Hobbits. There are no men living in the Shire, although they live nearby, in Bree. It is unusual, but not unheard of to find a Dwarven or Elven merchant making his way from one place to another. Hobbits are three or four feet tall, with short legs and slightly pointed ears. More description can be found on the Hobbits page.
The Shire was a fertile part of Arnor, but it was deserted later, and became the hunting-ground of the King of Ardethain. The Hobbits, who lived in mostly in Dunland, and some in depopulated areas of Cardolan and Rhudaur, got official permission from Argaleb II, at Fornost to settle the Shire. This was finally done in the year 1601 of the Third Age, by hobbits from Bree led by the brothers Marcho and Blanco.
By 30 years later, virtually every Hobbit in Middle-Earth could be found in the Shire. The Shire-Hobbits considered themselves loyal subjects of the King, although their country was rather isolated. Once Arnor was destroyed the office of Thain was made to replace the Kingship. For many years the Shire lived in peace.
In the year 1637, the Great Plague struck the Shire. Although it was lighter there then in other areas, around 1/8 of the population of the Shire perished. The Hobbits fell into a darker period, but they quickly recovered, the Shire was rebuilt, and it soon became legend to all but the Hobbit historians. Again, peace and prosperity reigned in the Shire.
Then, however, a large host of Gundabad Orcs raided Eriador, and a small party led by their King, Glofinbul, entered the Shire, despite the best attempts of the Rangers of the North to keep them out. In the Battle of Greenfields, Bandobaras Took led a charge against the Orcs, and destroyed them in battle, thereby saving the Shire. He soon became a folk hero in Hobbit legend. Darker days were approaching, however, in the form of the Long Winter. Although there was strife and war in the South, in far Rohan and Gondor, this little affected the Shire. The Hobbits were starving, and a famine followed, known as the Days of Dearth. Gandalf came to help the Hobbits survive, and this is where he acquired a fondness for them. Many thousands died.
The last major threat to face the Hobbits for many years was the Fell Winter. Although not as cold as the Long Winter, it brought a whole set of problems. White Wolves invaded the Shire, and the Horn-Call of Buckland was sounded. They preyed upon many, but were eventually driven out. Gandalf provided food so that the Hobbits did not starve.
For a long time the Shire was peaceful, until, many years later, a wizard and thirteen dwarves entered the home of Bilbo Baggins. Among these dwarves was Thorin Oakenshield, son of Thrain, and rightful king of the dwarf kingdom of Erebor. He and his company searched for a burglar, who they could use on their quest to enter Erebor, and reclaim the throne. Gandalf had chosen for them Mr. Baggins, and after much deliberation the party set out for the lonely mountain, plus one.
When Bilbo and home his fellow hobbits found him very queer, and quite a bit richer. He became somewhat of a loval attraction among the hobbits, but little did they know it was not his gold or odd new fondness for dwarves that would ruin the Shire's long lasting peace. It was a small ring, one he had found back in the misty mountains. He had merely used it move stealthily among enemies, but little did he know it was something at more sinister than a magical trinket. This was the one ring of Sauron, forged in the fires of Orodruin, and cut from the dark lord's hand by Isildur himself. Bilbo had unwittingly brought the Shire back into the powerful world.
But for now, Bible simply grew old. He rested, he wrote his adventures in a book, and he adopted Frodo Baggins, his nephew. It was at his 111th birthday party when he finally decided to leave the Shire forever, making quite a spectacle in the process. Fortunately for Middle Earth, Gandalf the Grey caught him as he left, and convinced him to leave behind his ring for Frodo.
After explaining the significance of the ring to Frodo, Gandalf sent him, and the ring, to Rivendell, in the company of Samwise Gamgee, Meriadoc Brandybuck, and Peregren Took. Gandalf left the Shire as well, seeking council with Saruman the wise.
For the creature known as Gollum, the previous bearer of the ring, had been captured and tortured by the enemy, and Sauron sent out his riders. The Nazgul arrived on the borders of the Shire soon after the party, determined to return with their master's treasure. They went as far as Hobbiton, scaring the local residents greatly, but eventually leaving to pursue the ring bearer and his companions.
Unfortunately the Nazgul incident was just the beginning for the hobbits of the Shire. Soon after the ring bearer left, the agents of Saruman began to enter the Shire. Supported by some of the local Hobbits, they took completely control of the Shire, brutally punishing those who resisted. When Saruman's plans in Rohan failed he and Grima Wormtongue escaped the confines of Orthanc and Saruman set himself up as field of the Shire.
Their reign however, was short lived, ending quickly when the ring bearer and his party returned. Meriadoc Brandybuck and Peregren Took raised the Hobbits with great effect against the invaders, and drove them out in the Battle of Bywater. With Saruman and Wormtongue dead, peace once again returned, and regined for a long time.
King Elessar granted the Shire to the hobbits, and decreed that no men would enter from that point on. Samwise Gamgee was elected mayor for seven consecutive terms, before eventually passing on, and things returned to normal. Slowly, the Shire drifted out of men's thoughts, and that is just how the hobbits like it.
The Shire, while part of Ardethain, had no true governance, as they saw themselves as citizens of the King. Only when the royal line was broken in Ardethain and the North-Kingdom was broken did they declare themselves independent. The Shire was ostensibly ruled by the Thain, a originally military position that inherited down through the male line, currently residing within the Took Clan. Although by the late Third Age is became mostly a ceremonial position, it was one of great honor and respect. The Thain is the captain of the Hobbitry-at-Arms, although by the late Third Age this simply became a relic of harder times, as well as the Shire-moot, which is an emergency meeting of Hobbits in times of crisis. The Mayor of the Shire, who governed from the de facto capital of the Shire, Michel Delving, was elected by the Hobbits every seven years at Lithe, although the Mayor did little but preside at banquets, and have the titles of Postmaster and First Sheriff. The Hobbits of the Shire truly needed little governance to keep order, as they are remarkably civil and are not inclined to do any crimes, although they did have laws dealing with property, inheritance, and keeping the peace within the Shire. It is believed that no Hobbit has ever killed another Hobbit in the Shire, and besides perhaps the occasional spoon-thievery, the Shire is virtually free of crime.
Hobbits live a sedentary lifestyle, being inclined to sit at their home gardening, taking a hike, smoking pipe-weed, or enjoying the natural verdant landscape of the Shire. Its small size, relative lack of importance, and it's being guarded by the Rangers of the North means that the Hobbits are almost never summoned to fight, and most of the Hobbits are privy to a life of ease. Although there are class distinctions in the Shire (the Took family is obviously more wealthy then Farmer Cotton), they are not overly pronounced. Most of the Hobbit's make a living off the land, being farmers, although many own businesses, and do other necessary jobs within the community. Hobbits eat in great amounts and often, and tend to be round in the stomach, eating six meals a day, and perhaps more on a holiday. They are quite happy going about their unadventurous lives undisturbed by the rest of Humanity.
The Hobbits speak a dialect of Westron known as Hobbitish, which is closely related to the Rohirric language. To the people of Gondor, it is peculiar and strange. Because the Hobbits have little government and no noble class, there exists no deferential pronoun, only the familiar, which seems queer to the Gondorians and likely contributed to the myth that Pippin was a high noble of the Shire ("Ernil i Pheriannath")
There is little need for a major external economy in the Shire, and they do not have any external economy besides some trade deals with Buckland and Bree. Their internal economy is strong and mostly agriculture-based. Their currency is based on silver and gold pennies.
The Hobbits have little military to speak of, the only thing they have are 12 Sheriffs, who are law enforcement officers, although more can be summoned in time of need. When the time calls for it, the Hobbits can summon a militia of sorts, consisting of untrained farmers armed with farming implements, knives and clubs. The Shire can muster quite a few archers however. The armed forces of the Shire by the late Third Age, as a whole, might be enough to deal with wolves, or ruffians, but would absolutely not stand against any kind of army. When the Shire is in serious danger, it is protected by the Rangers of the North, the uncredited and silent guardians of the Shire.
They know extremely little about outside lands, and what they do have is distorted by legend and myth. They are friendly with Bree (although they hold the Shire pipeweed to be superior to the Breelander's leaf), as well as Buckland. They are host to the occasional dwarvish merchant or elvish wanderer traveling west.