Well, I think it depends how precisely you define 'allegory'. There must be some 'middle ground' where allegory blurs into 'applicability'. Tolkin himself said it was impossible for an author to be unaffected by the events going on around him. I think Tolkien was objecting to a straight, one to one, allegorical linking of LotR & WW2. But You can't deny a number of very close similarities between LotR & events in the 20th century, especially the wars, though maybe more WW1 than WW2.
Plus, I suspect Tolkien 'protested too much' when he said he hated Allegory. What's Leaf by Niggle if not allegory? He was also capable of using allegory in a very effective way, for instance with the Tower analogy in Monsters & Critics.
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