[Boromir88]

First, I don't know enough about Balrogs and Dragons to talk about how they are the way they are, so that question I can't answer. As for your first question about why people get in their minds to "rule" the world?

I think first of all, Melkor and Sauron wanting to rule the "world" was Tolkien mixing in his concept about dictators. Tolkien was a man who hated industrialization, he was more of a nature person, and I think Melkor and Sauron could represent possible Satan (since he was a religious man) or some of the ruthless dictators of WW1, who wanted to rule the world. Now on to why?

We may very well never know the why, but if you ask me they get these ideas in their heads from their peers they look up to and from general society. You always here about corrupt politicians, well who raised these people? Where have they been growing up at? Society. They didn't just fall from the sky. I also think a lot depends upon your childhood, your parents, and your peers. Sauron was a servant of Morgoth, so you might tell where he got some of his ideas from. And for the explanation for Morgoth you can simply say some people just want power, they aren't happy until they rule everything and control everything. Some of the most cruel, successful, wicked dictators, like Hitler and Stalin, have also been known to have many mental illnesses. For example like ADD and paranoia, the constant fear that someone will betray them and take all their power.