Middle-earth Portal

Esgaroth and Lake-town may have been separate settlements established on the same site, one predating Smaug's destruction of Dale and Erebor and the other built afterwards. There is mention in The Hobbit of "old pilings of a greater town" that could be seen at low tide.

Esgaroth was always independent of Dale and had no king. The people had always elected from among the old and wise the Master of Lake-town and did "not [endure] the rule of mere fighting men."

In the year 2941 of the Third Age the town was attacked by the dragon Smaug, but Bard the Bowman, who had indirectly learned of a weakness in Smaug's armour that had first been noticed by Bilbo Baggins, slew the dragon. The town was wrecked by the dragon, but afterwards it was rebuilt in a different location using some of the treasure that Smaug had stolen, though the town's Master ran off with some of the gold. Part of the town's population followed Bard to resettle the Kingdom of Dale.

As a trading people, the Men of Esgaroth knew the Common Speech, Westron. However, amongst themselves they spoke an ancient form of it, which was loosely related to but distinct from the also-ancient language of the Rohirrim. Tolkien "translated" Westron into English in his text, so to represent the ancient relative of it that the Rohirrim spoke, he substituted Old English. Thus, Tolkien substituted Old Norse for the language of the Men of Esgaroth (in person and place names, etc.) because it is an ancient relative of Old English (of which Modern English is largely derived).

Master of Lake-town is the title given to the elected leader of Esgaroth. The Master of the town when Bilbo and Thorin's Company arrived in The Hobbit was portrayed as capable, but more than a little greedy and cowardly. His name was never given, although he earned the unpopular title "money bags" later. He was one of the few people in the town who did not eagerly welcome Bilbo and the Dwarves, fearing reprisal from the Wood Elf King. When Lake-town was destroyed by Smaug, the Master was largely held accountable, especially since he was one of the first to flee. Bard the Bowman, who had slain the dragon, was the hero of the people but he refused to seize control, insisting on working with the Master who did all he could to shift the blame onto the Dwarves.

The Master did not fight in the Battle of Five Armies, instead, he stayed behind to direct the rebuilding of the town. Afterwards Bard gave much gold to the Master for the people of the town, but he fell under "dragon sickness" and kept the gold for himself, fleeing Long Lake only to die of starvation in the wastes. It was afterwards stated by Gandalf that a new Master had been elected who was more wise.