Erebor
This is the background of the dwarf city of Erebor.
The Lonely Mountain
Erebor is a city built by dwarves within the Lonely Mountain. Ruled by the dwarf king Thror, his son, Thrain, and grandson, Thorin, it was the richest city in the world because of the rich veins of precious metals and gemstones. Even the elves of Mirkwood came to pay homage to the mightiest dwarf kingdom.
Dale
Dale was a human town on the slopes of the Lonely Mountain, whose markets flourished because of the wealth of Erebor.
Smaug
Smaug was a dragon from the north who was drawn to the Lonely Mountain because of the enormous wealth held within. He swept down like a hurricane and scared everyone away from Erebor and Dale, nestling deep inside the mountain on his newfound treasure.