Hobbits are (or were) a small people, smaller than dwarves-and they have no beards-but very much larger than liliputians.
Now there is a reference to Jonathan Swift from the first edition that I had completely forgotten about. "Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men. It is a man's part to discern them, as much in the Golden Wood as in his own house." - Aragorn