Amazing really, considering.

Hobbit — J. R. R. Tolkien modestly claimed not to have coined this word, although the Supplement to the OED credited him with the invention of it in the absence of further evidence. It seems, however, that Tolkien was right to be cautious. It has since turned up in one of those 19th-century folklore journals, in a list of long-forgotten words for fairy-folk or little people. It seems likely that Tolkien, with his interest in folklore, read this and subconsciously registered the name, reviving it many years later in his most famous character