Hobbits
 

Where did hobbits come from? I know they didnt show up till 3rd age. Right? So i just got to thinking did they evolve from elfs, humans, or dwarfs? I know Eru had to be involved, but were they his creation? Or were they created like the dwarfs were by Aule, i dont think Aule would try anything like that again but maybe another Valar or Maia would. Any ideas?

They evolved from Men and that is precisely why they are so similar to us compared with dwarves and elves.

In particular, based on the similarity of their languages, they seem to have been related to the ancestors of the Rohirrim.