This article is from the Tolkien Newsgroups FAQ, by Steuard Jensen sbjensen@midway.uchicago.edu with numerous contributions by others.
[This supplements question V.G.1 of the Tolkien FAQ.]
[I have written a much more detailed analysis of this question; it is
on the web at: http://tolkien.slimy.com/essays/Bombadil.html]
Theories on Bombadil's nature abound. Many people believe that Tom
was a Maia: if we assume he is one of the types of entities we know of
from the Silmarillion, this seems to be the best fit. (A closely
related suggestion is that Tom was an Ainu who never took a place in
the usual hierarchy of Arda). Other popular views make Tom a nature
spirit of a kind never explicitly described, either one of many, or the
incarnation of Arda itself. These theories are inspired by comments at
the Council of Elrond and in _Letters_.
Many other possibilities still arise regularly (for example, that he
is some particular Vala or even Eru himself), but there are fairly
strong arguments against them. (For example, Tolkien said in several
Letters that Eru did not physically inhabit Middle-earth.) Some people
argue that Tolkien intentionally left Bombadil an enigma even to
himself, and that therefore any attempt to find out what he was is
doomed to fail. A truly satisfying explanation of Bombadil's nature
would explain Goldberry as well.
 
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