In the Misty Mountains, far above the hidden Elf-refuge of Rivendell, lies the entrance to one of the strongest goblin-kingdoms remaining in Middle-earth. Called Goblin-town by its vile inhabitants, this subterranean realm was once ruled by an evil creature who called himself the Great Goblin, until he met his doom at the hands of Gandalf the Grey. Wielding the goblin-bane blade known as Glamdring, the Wizard slew the Great Goblin while rescuing the company of Thorin Oakenshield. This fateful event began a new chapter in the history of Middle-earth, for it was within Goblin-town that the hobbit Bilbo Baggins fell into the deep cavern where the creature Gollum lived...and his hand fell upon a small golden ring upon which balanced the fate of the world.

The goblins of Goblin-town avoid the sun, preferring instead to remain hidden in their dark caves, but they are not cowardly. They are a vicious breed, full of greed and hatred for beautiful things. Allied with Wargs from the eastern borders of the Misty Mountains, they usually raid small villages, but once they marched upon the Lonely Mountain Erebor to fight in the Battle of Five Armies.