The Hobbit was written before The Lord of the Rings and serves as an introduction to the larger story found in J.R.R. Tolkien’s other books. This is the book that introduced the world to *Middle Earth**, hobbits, dwarves, and so on; or, at the very least, brought these creatures into the realm of the public consciousness.
What makes The Hobbit and others of Tolkien’s stories (as well as other authors like J.K. Rowling and Neil Gaiman and Douglas Adams) different is the adoption of common myth and legend that is part of the culture of the people in England, Wales, Scotland, and Ireland. These are often adoptions of other myths, like Norse mythology, and lead to an adaptation of the old stories into something new and different.
Tolkien was also a linguist and spent a great deal of time both studying language and how it worked. For The Hobbit and his other stories, Tolkien literally created the languages used and written in his books, most notably Elvish with it’s rune-like symbols (very straight with sharp corners).
Bilbo Baggins is recruited as the fourteenth member of a party (made up of dwarves) to travel across Middle Earth to help reclaim a mountain and a fortune that had once belonged to the dwarves and their ancestors. While traveling and before getting to their destination, Bilbo and the dwarves have many adventures where Bilbo has to prove himself against all kinds of obstacles and people, while also preparing himself to truly become a hero and something altogether different from what who he was at the beginning.