In the year 1601 of the Third Age, the Fallohide brothers Marcho and Blanco led a group of Hobbits west from Bree and crossed the Bridge of Stonebows (later known as the Brandywine Bridge) and settled in the empty land they found. This became year 1 of the Shire-reckoning. King Argeleb II, the tenth King of Arthedain and a direct ancestor of Aragorn, granted the Hobbits this unused land and thus it became The Shire.
In III 2340 Hobbits expanded the Shire to include also Buckland, and Brandy Hall was founded, though Buckland was never considered part of "the four farthings of the Shire". Little is told about the history of the Shire, except for genealogical details about families, such as the Baggins, Brandybucks, Tooks, and many more. However...
On 22 September TA2890 Bilbo Baggins was born, and a few decades later his adventures would bring focus on the Shire. A fateful morning in TA2941 an old bearded man with a blue pointed hat approached Bilbo and soon the Quest of Erebor began, chiefly taking place in the East. Eventually Bilbo brought back to Bag End treasures that greatly enriched hobbits all of the Shire, but one of the smaller items, a modest ring, would also prove extremely hazardous, though not at once. In TA3001 Bilbo leaves the Shire and settles down in Rivendell, after giving the One Ring to Frodo.
In TA3017 Gollum (the former bearer of the One Ring) was released from Mordor, probably shortly after he had revealed "Baggins" and "Shire" to Sauron. The Shire was still innocently unaware that the Dark Lord soon would begin the War of the Ring and their farthings were at stake. In middle April TA3018 Gandalf tells Frodo about the One Ring and its powers and hazards, urging him to leave the Shire promptly, though Frodo hesitated, he was slow and it took him more than five months to set out. On September 23, the day after his fiftieth birthday, Frodo set out from Bag End with Sam and Pippin towards Crickhollow in Buckland (where Merry would join them on the quest). Already that night they found themselves pursued by the Black Riders, and in LOTRO that is the night a new hobbit character sets foot upon the Shire.