help me understand

[The Saucepan Man]

The Shire was meant to be England

To be more specific ...

'The Shire' is based on rural England and not any other country in the world - least perhaps of any in Europe on Holland, which is topographically wholly dissimilar.

(From The Letters of JRR Tolkien - Letter 190)

And getting even more specific:

It is in fact more or less a Warwickshire village of about the period of the Diamond Jubilee ...

(From Letter 178)

The village in question being Sarehole, where Tolkien spent his early years after returning with his mother from South Africa in 1895, and the said Diamond Jubilee being that of Queen Victoria in 1897.