The Shire is a homogeneous idyllic utopia of petite-bourgeois smallholders(basically, a classic European fascist fantasy), and it has allied with the various representatives of the Middle-earth ancient landed aristocracy, like the royal house of Gondor and Arnor represented by Aragorn, the leading aristocratic family of Gondor represented by Boromir, the Elvish royalty represented by Legolas, the Dwarfish aristocracy represented by Gimli, the obscurantist clerical/priestly class represented by Gandalf, and other reactionary relics of the premodern world. All gathered to eradicate Lord Sauron's forces that represent urbanisation, industry, scientific progress, and the proletariat. LoTR is essentially WWII retold from the perspective of fascists, but the fascists win.
So yes, in LoTR terms, The Shire is the equivalent of Nazi Germany.
So yes, in LoTR terms, The Shire is the equivalent of Nazi Germany.