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Good question, Abercrombie... I'm never sure whether I ought to capitalize "hobbit" or not.
Maybe a capital E was used with "Elves" to distinguish between these tall, regal Elves and the diminutive mythological elves.
When referring to Men as a race, it would have to be captialized to let the reader know that it actually was the race he was referring to, not any group of males.
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