And the dragon sat under the mountain

Erebor also called a Lonely Mountain - dwarven kingdomn, ruled by the Durin tribe. Erebor was founded by Thráin I in 1999 TE. The mines were bringing lot of gems and gold, the deposit was very rich, so Erebor became the greatest kingdom of dwarves. Their most cherished jewel was Arkenstone, which became a royal gem, held by rulers of Lonely Mountain. Dwarves traded with city of Dal, which also became very rich during Erebor's golden days.

In 2770 the kingdom was attacked by Smaug and the riches were anected by him, the beast sat on the gold and was killing everyone who wanted to put hands on his precious gems. King Thror and his family fled with dwarf survivors - among them was prince Thorin. He returned with a group of loyal dwarves and took the Lonely Mountain from dragon's claws.

Under Erebor, conflicted races, among them were dwarves, elves, goblins, orcs and wargs, ran a Battle of Five Armies, won by the forces of combined dwarves and elves. Erebor again could breathe, under rule of king Dain II Ironfoot. Thorin was killed in the battle, though, but his memory survived ages.
A city founded by people from the North on the southern slopes of Lonely Mountain. They maintained friendly relations with the dwarves who once inhabited the Kingdom under the Mountain. The main occupation of its inhabitants was trade. The settlement was burned down when Smaug arrived. After the dragon was destroyed, the city began to develop again.
Located in the north of the Wild Lands, in the shallows of the Long Lake. Its inhabitants were engaged in fishing and trade, including delivering goods to elves from Mirkwood. The importance of the settlement increased when Smaug destroyed the city of Dal, from where some of the people had came. The townspeople were delighted to greet the dwarf Thorin remembering the old prophecies. They also equip the company with provisions and ponies for the expedition to the Mountain. A large part of Esgaroth was destroyed during the attack of Smaug, but one of the inhabitants - Bard - killed the monster with a well-aimed bow shot. Thanks to the treasure from the mountains, the city was quickly rebuilt.