Setting
The Hobbit takes place in the fictional land of Middle Earth towards the end of the Third Age (2941-2942). Most scholars believe that Tolkien based this world off Britain at the height of the Middle Ages. The locations the party visit are: The Shire; a small collection of hobbit villages, the plains of Eriador, the Misty Mountains, Mirkwood and finally the Lonely Mountain.
Conflicts
Person vs. Person
The person versus person conflict is mainly between the dwarves and the dragon Smaug. Smaug destroyed their home and stole their treasure and the dwarves have vowed to defeat Smaug and retake their home. During their journey to the Lonely Mountain, the party encounter all manner of dark creatures including: trolls, rock giants, goblins, Gollum, wargs and giant spiders. Towards the end of the novel is the massive conflict known as the Battle of the Five Armies, which involved the dwarves of the Iron Hills, the Wood-elves, the Lake-men, the goblins and the wargs.
Person vs. Self
Bilbo Baggins suffers a huge internal conflict in the novel largely due to his mixed family heritage. Bilbo's father was a Baggins; a family that is characterized by their laziness and cautious nature. His mother on the other hand was a Took; a family that is known for being adventurous and causing mischief. Throughout the novel Bilbo is torn between his Baggins and Took blood; whether to stay on the sidelines and keep safe or to step up and be hero. This conflict eventually changes Bilbo's outlook on life; by the end of the novel he is no longer lazy and cowardly but strong and heroic.
Thorin Oakenshield also goes through an internal conflict due to his greed. Thorin, at the beginning of the novel is a proud leader that the other dwarves look up to. However once they acquire Smaug's treasure, Thorin becomes obsessed with finding the Arkenstone and lets his greed cloud his judgement causing him to make several irrational decisions like threatening to kill Bilbo and sparking a conflict with the Lake-men and the Wood-elves.
Thorin Oakenshield also goes through an internal conflict due to his greed. Thorin, at the beginning of the novel is a proud leader that the other dwarves look up to. However once they acquire Smaug's treasure, Thorin becomes obsessed with finding the Arkenstone and lets his greed cloud his judgement causing him to make several irrational decisions like threatening to kill Bilbo and sparking a conflict with the Lake-men and the Wood-elves.