The Merchants of the Watchful Peace

 Middle Earth suffered from terrible calamities at the end of the second millennium of the Third Age - the realm of Arnor was destroyed, the line of kings ended in Gondor, and the great underground city of the dwarves, Moria, was abandoned due to the Balrog - causing a mass exodus from Lorien itself, and the death of their ruler, Amroth.

And yet, we have four centuries of what is described as the "Watchful Peace" - where Sauron flees to the East, where the Nazgul lay quiet within Minas Morgul, and the where the realms of Middle Earth rebuild the best they can.  However, very little is actually known about the Watchful Peace itself - but we can speculate about it.  In particular, that this age may have been dominated by some of the lesser lands of Middle Earth, and focused on trade.

Let's start with Tharbad, the city that we know survived the destruction of the Northern Kingdom.  I have theorized elsewhere that the city had great significance as "shared capitol" of Elendil's Kingdom, but more of a symbolic kind whose purpose ended when the Arnor split up.  Postwar, the city probably absorbed a number of refugees from the wars, but suffered from the loss of trade first from the fall of Fornost, and second from the loss of Moria.  And yet, but the time the Watchful Peace began, the situation would have changed, in that it sat at the perfect place for trade between the north and south.  The Shire was not too far away to the northwest, and appears to have been thriving - towards the end of the period, they colonized Buckland.  The elven nation of Lindon laid beyond as well.  To the direct north, Bree-land was also a destination, and from there a long journey eastward over the High Pass into Wilderland.  The Eotheod likely were trading partners as well there, being a bit north of the ancient dwarven road; and the Old Forest Road would take traders and merchants to the shores of the River Running, likely a bridge or ferry.  From there, upstream the trade route would lead to the new dwarven kingdom at Erebor, and the human settlements at Esgaroth and Dale.  The dwarven road continued onwards to the Iron Hills themselves, and there would also be trade downriver to the lands of Dorwinion.

Tharbad itself was in a secure position thanks to its position square in the middle of the Great Fens along the upper course of the Greyflood.  It might have asserted itself as the heir of the (speculative) princedom of Minhiriath, but probably was ruled by merchant houses that may have chosen one among them to be the Prince of Tharbad.  During this time, they may have extended their realm to the north to the borders of the Barrow Downs and South Downs, maybe holding Andrath between them as an outpost.  The meeting of the North-South Road and the one from the Shire likely held a small settlement, and they also might have held Sarn Ford.  The lands to the south were wild, and their holdings in Enedwaith were probably sparse, limited to no more than forts on the edges of the swamps guarding the causeway.  They also likely controlled the Greyflood's vale, with towns along its length, even at the ancient port at Lond Daer.

With Gondor decaying slowly, there was the rise of one part of the realm - the independent princedom of Belfalas.  While they might have asserted their rulership of Gondor, or their independence, they stayed loyal to the line of Stewards (and in fact their ruler sat on the Steward's Council).  Nonetheless, their star certainly rose in ascendancy during this time.  As discussed elsewhere, Belfalas has been revealed to Tolkien's writings to be one of the earliest Numenorean settlements, by a family of Faithful separate from Elendil and his sons; Elendil also granted the land a Princedom under his rule.  The land seemed to grow significantly during this time; the beacon-hill system (that predated and probably inspired the later one for Rohan) was set up in the absence of the palantiri.  Their main city was renamed in honor of the lost king of Lorien, Amroth.  Where they probably thrived the most during this time is by sea trade.  The North-South Road through Calenardhon became more disused with the population of that part of Gondor falling off, so any trade probably went by sea between Tharbad and Dol Amroth.  The city likely became a central point for goods for all of Gondor coming there, and even points further south, leaving the ruling Lords of Dol Amroth wealthy.

And we come to the final city of the times - Umbar.  Umbar's history is murky for the time period; we know the Corsairs have taken it back after the Watchful Peace begins, yet it is still under Gondor's control as late as 1899 TA.  A statement that it fell after Sauron's return would seem to indicate that it remained under Gondor's control during the Watchful Peace.    Here again we can speculate that like Tharbad the city could've been dominated by merchant families, interested in plying trade further along the coast or even inland to the kingdoms of Harad.  The Corsairs could be in exile further to the south, behaving more like traditional pirates and raiding merchant ships.  As sort of a gateway between north and south, the city would have thrived.  Ironically, when the Corsairs took over again, this would have ended this age of goods flowing to and from the city.

In the end, with the return of Sauron to Dol Guldur everything took a turn for the worst.  Tharbad eventually succumbed to massive flooding and the town was abandoned.  Umbar fell again to the Corsairs and remained under their control for the remainder of the Third Age.  Belfalas managed to thrive, however, and remained the most vibrant part of Gondor in the days to come.

Again, much of this is heavy speculation, but the idea of this sort of idyllic period where things improved for the 400 years of peace doesn't seem far fetched.  In many ways, the heroes of LOTR were going through the remnants of these routes - and likely there were established once again with the Fourth Age.