[Boromir88]

I am going to digress way back earlier to Lal's post here:

There is also the thorny topic of fate vs free will to consider, including whether all the actions of the characters are fated (or determined by Wryd, considering the influence on Tolkien, too, of Beowulf), which would necessarily have implications for both characterisation and on the significance of events such as Frodo's acceptance of Gollum.

Indeed it is a thorny topic, and the term 'Providence' is something Tolkien didn't wish to use. I don't think the term ever appears except in some minimal moments in Tolkien's letters. The Oxford English Dictionary defines providence as:

3. The foreknowing and beneficent care and government of God (or of nature etc); divine direction, control or guidance; 4. Hence applied to the Deity as exercising prescient power and direction.

But, what I have think to come to found through the books, is that through Free Will people can change their 'luck', and hence be rewarded by Eru. Indeed Tolkien notes he had been a lucky man:

"I have always been undeservedly lucky at major points."

I think Tolkien would be more in line with Tom Shippey's remarks in The Road to Middle-earth that 'Luck' would be a more suitable word in Tolkien's works than 'Providence' or 'chance':

However, ‘chance’ was not the word which for Tolkien best expressed his feelings about randomness and design. The word that did is probably ‘luck’.

Shippey goes further to say that it is perhaps better to have luck than it is to have providence:

‘change their luck’, and can in a way say ‘No’ to divine Providence

It's the ability of individuals where they can 'change' their luck, and therefor fate can be denied. I'm reminded of the example with Frodo and the destruction of the Ring. Where I think it's quite clearly established through several places that it was Frodo's previous acts of free will, that gained him his salvation:

''Frodo had done what he could and spent himself completely (as an instrument of Providence) and had produced a situation in which the object of his quest could be achieved. His humility (with which he began) and his sufferings were justly rewarded by the highest hounour; and his exercise of patience and mercy towards Gollum gained him Mercy: his failure was redressed.''~Letter 246.

Here is one of the few times where Providence does appear, and I think there is a providence, or a fate, but it's to a minimum level and can be changed. Frodo was an instrument of Eru, but it was Frodo's free will and pity towards Gollum that gained himself Mercy in the way that his failure (failure to destroy the Ring) was redressed. This is also noted in Letter 181:

’'But at this point the ’salvation’ of the world and Frodo’s own ’salvation’ is achieved by his previous pity and forgiveness of injury. At any point any prudent person would have told Frodo that Gollum would certainly betray him , and could rob him in the end. To ’pity’ him, to forbear to kill him, was a piece of folly, or a mystical belief in the ultimate value-in-itself of pity and generosity even if disastrous in the world of time. He [Gollum] did rob him and injure him in the end- but by a ’grace’ that last betrayal was at a precise juncture when the final evil deed was the most beneficial thing anyone could have done for frodo! By a situation created by his ’forgiveness’ , he was saved himself, and relieved of his burden.''

I agree with Shippey and feel that Luck is a better term for it, than Providence. There is an element of fate, and Eru uses people for it. I don't think it was a coincidence that Bilbo was meant to find the ring (as Gandalf puts it) who happens to be Frodo's heir, who happens to be the only one during this time, as Tolkien tells us with the strength of will to get the ring to the cracks of doom. So in those ways Frodo was 'an instrument of Providence,' but it was his own Pity and Mercy towards Gollum, where Frodo's own 'luck' was changed, and it earned him Eru's Mercy, so Eru intervened and relieved Frodo from the burden of the Ring.

Kind of getting back onto the current discussion. I've found Tolkien talking about the TCBS in Letter #5 to be interesting. And the striking similarities to the Istari:

"the TCBS had been granted some spark - certainly as a body if not singly- that was destined to kindle a new light, or what is the same thing, rekindle an old light in the world".

When Cirdan gives Narya to Gandalf:

"For this is the Ring of Fire, and with it you may rekindle hearts in a world that grows chill"

And in Unfinished Tales, The Istari:

"...opposing the fire that devours and wastes with the fire that kindles and succours in wanhope and distress."