Tolkien and the other old-time fantasists may have felt themselves to be working within the Western tradition, from which they would cite the gods and heroes of classical literature as their precedents. But to believe that is to overlook the fundamental difference between their fantastical creations and Homer’s: Homer believed in the reality of his gods and heroes and they did not.
I mention this difference between the fantastical as it existed in olden times and today, which some may think a trivial one, because we are or ought to be coming to realize that acknowledged fantasy, of the kind the movies have inherited from science fiction, is a different kind of thing from fantasy that doesn’t know it is fantasy. Audiences may not know or care about this as they pour into Avatar screenings, but that’s because they have long learned to expect something quite different from what a Homeric audience — or any other audience in the old Western tradition — once expected. They expect no imitation but allusion to reality and to other “art” or artifice indiscriminately and would regard as irrelevant any complaint that it doesn’t look like the real world. The world of the movies and television and the other visual media is probably more real to them anyway. But if there is no longer any attempt at imitation of reality but only the aptly-described “magic” of the movies making new realities, then there is no longer any such thing as art as it has been understood for the last three thousand or so years in the West.