Tolkiens Middle-Earth is though _our_ Earth. It is an instance of the "found manuscript conceit" with Tolkien just being the english translator of Bilbos writings. A copy of Bilbos manuscript (with later notes and additions by other scribes) survived until our time.

https://en.wikipedia.org/wiki/Red_Book_of_Westmarch

That backwater agrarian villages/hunter gathering tribes have the same diverse ethnicites as downtown Los Angeles is a different issue.