Perhaps lost in this discussion is the fact that for all practical purposes, Tolkien invented the modern fantasy fiction genre as we know it. Elves, trolls, dwarfs, orcs, wizards, halflings, and all that. He is also the predecessor to modern fantasy gaming, ala EQ and WoW.

Yes, one may find other examples of "fanciful" works, for instance, George Eliot's "The Lifted Veil", early horror works of Stoker and Shelley, or perhaps Jules Verne (which is not fantasy, so much as sci-fi), but modern fantasy, as we know it, began with Tolkien.