Of Hobbits and Dwarves

[Veritas]

Chapter 2 of the Silmarilion:
It is told that in their beginning the Dwarves were made by Aulë in the Darkness of Middle-Earth; for so greatly did Aulë desire the coming of the Children, to have learners to whom he could teach his lore and his crafts, that he was unwilling to await the fulfilment of the desingns of Iluvatar.

Aulë didn't want to wait, so he created his own creatures, the Dwarves. Iluvatar was angry and said that they had to sleep until the Elves and the Human were on Earth.

I don't know about the Hobbits.