[HerenIstarion]

For your further consideration:

Letter 165

'Middle-earth', by the way, is not a name of a never-never land without relation to the world we live in (like the Mercury of Eddison).4 It is just a use of Middle English middel-erde (or erthe), altered from Old English Middangeard: the name for the inhabited lands of Men 'between the seas'. And though I have not attempted to relate the shape of the mountains and land-masses to what geologists may say or surmise about the nearer past, imaginatively this 'history' is supposed to take place in a period of the actual Old World of this planet.

and

Letter 183 (notes to W.H.Auden upon his critique of LoTR)

I am historically minded. Middle-earth is not an imaginary world. The name is the modern form (appearing in the 13th century and still in use) of midden-erd > middel-erd, an ancient name for the oikoumenē, the abiding place of Men, the objectively real world, in use specifically opposed to imaginary worlds (as Fairyland) or unseen worlds (as Heaven or Hell). The theatre of my tale is this earth, the one in which we now live, but the historical period is imaginary. The essentials of that abiding place are all there (at any rate for inhabitants of N.W. Europe), so naturally it feels familiar, even if a little glorified by the enchantment of distance in time.