I just found an interesting thread on this topic:
Ancient British cultures reflected in Middle-earth
especially posts # 25 (by Rumil), #26 (by the Squatter of Amon Rûdh) and #35 (by Man of the Old Hope) are very enlightening.
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Yes! "wish-fulfilment dreams" we spin to cheat
our timid hearts, and ugly Fact defeat!
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