Can you explain the sentence structure 'In a hole in the ground there lived a Hobbit'? Why put the verb before the subject?

I think it adds drama or style and is best suited for the stage or page. Could also be used to preserve effect in translation of foreign works, "Thus Spake Zarathustra..." in German: "Also sprach Zarathustra"

It's an issue of fluidity and aesthetics.

If you rewrite the sentence,

"A hobbit lived in a hole in the ground."

it does not sound nearly as pretty, does it?

This is called subject–verb inversion, and is done for a variety of reasons. The referenced article mentions four sorts:

1. Locative inversion
2. Directive inversion
3. Copular inversion
4. Quotation inversion

This one is locative inversion, because the sentences starts with a location specification, a “where” phrase. This is completely common in English.

• At the back of the closet stood a secret door.

• Down the street came the ice cream truck.

I once made a study of the inversions in Tolkien (whom you have quoted above without attribution), and it is a distinctive style choice in some cases, especially in the copular inversion. Furthermore, the inversions vary in number and type depending on whether you are looking at The Silmarillion, The Hobbit, or The Lord of the Rings.

English is primarily ordered SVO , Subject Verb Object, or more accurately primarily right branching, -primarily-. English is not as fluid in word order as more inflected languages like Latin (which, whatever your Latin teacher might say, is primarily SOV, just not as primarily as English).

That said, even outside of poetry and other literature, there is some slight room for word order variety. The communicative purpose in English (as I surmise in other languages) is for emphasis. Even if something is grammatically the subject, one mat want to emphasize the object or even give some suspense as to the subject or verb.

Surely 'John gives the book to Mary' means something very different from 'Mary gives John to the book'. But one can introduce things in a different order but maintaining the ostensible roles.

It was given to Mary by John, the book it was.

(yes a bit stilted but there it is)

Whether stylish or not, I've heard such variations are characteristic of Irish English, where the substrate of Irish Gaelic has VSO word order. I don't know if there's a causal relationship but it is an observation.

Tales traditionally begin with a slight delay – usually a formula like “so heisst es” or “Once upon a time” or even “Wance upon a time, an’ ’twas nayther my time nor your time, but ’twas somebody’s time” – which takes a grip on the audience and provides them a cue to become quiet and attentive before the first event or character is introduced. Tolkien knew this as well as anybody: he was famous for the resounding “Hwæt!” with which he opened his Oxford lectures on Beowulf.

He was, moreover, an accomplished poet in traditional metres; and it’s hard to imagine that that crafty decelerando from the urgent anapaests to solemn iambs transforming in mid-flight into trochees was anything but a deliberate device to throw the emphasis onto the final word, hobbit.

˘ ˘ ¯ ˘ ˘ ¯ ˘ ¯ ˘ ¯ ˘

In disagreement with all the other answers.

I would argue that the quote is, in fact, in the correct English word order SVO.

In the OP's analysis the sentence was broken down as follows:

In a hole in the ground there lived [verb] a hobbit [subject].

However, this is wrong. It should be:

In a hole in the ground [PP - subject] there lived [VP - verb] a hobbit [NP - object].

(PP = prepositional phrase, VP = verb phrase, NP = noun phrase)

While a relatively unusual/rare construction, prepositional phrases, especially when referring to time or space, can function as the subject of the sentence. This is what you are seeing here.

In a hole in the ground there lived [verb] a hobbit [subject].

---

The prepositional phrase "in a hole in the ground" functions as adverb of place (where).

This is the normal or usual way of writing this type of sentence: "A hobbit lived in a hole in the ground."

The subject sentence is written in the format adverb-verb-subject. Writers resort to this format, perhaps as a matter of style, to put variety to their work by doing away from the usual subject-verb-adverb. Others do this for emphasis or to direct the attention of their readers to a particular part of the sentence.

The subject sentence is then just an inverted form of the sentence following the format adverb-verb-subject. However, the "there" in the OP may be omitted without adversely affecting the sentence or the thought that it is trying to convey, to wit:

In a hole in the ground lived a hobbit.

If "there" had to be used, there should have been a comma before it. I read here (Commas and Introductory Elements) that "When a prepositional phrase expands to more than three words, say, or becomes connected to yet another prepositional phrase, the use of a comma will depend on the writer's sense of the rhythm and flow of the sentence." [emphasis mine]

My sense of rhythm tells me that it should be written with a comma to separate the phrase from the main clause, "there lived a hobbit." and to prepare the reader to what's to come next. Thus,

In a hole in the ground, there lived a hobbit.

If we are ignoring the 'in a hole in the ground' part and just discussing

There lived a hobbit.

Then I would say that this is fairly common in English when asking someone to think of something new. It is a way to introduce something new into the conversation. At the start of a book is a perfect example.

The simplest example is when you want to tell me that something exists;

There is a ghost called Caspar.
There are a lot of new gadgets.

In fact, you can't write this;

A ghost called Caspar is.
A lot of new gadgets are.

So 'to be', without an object, always works this way.

Other verbs can do it, too, but it does seem harder to come up with conversational examples. I think verbs which indicate existence suit it best: to be, to live, to appear.