The Shire's gossip about Bilbo's disappearance lasts for months.
Most people think that Bilbo finally went crazy, ran off into the wild, and "[fell] into a pool or a river and [came] to a tragic, but hardly untimely, end" (1.2.2).
They all agree that it's probably Gandalf's fault, and they hope Frodo will settle down and grow some Hobbit sense.
Frodo lives by himself but he has lots of friends: his best friends are Peregrin Took (Pippin) and Meriadoc Brandybuck (Merry). Remember them?
Frodo enjoys going on long walks by himself (he's a Virgo), and Merry and Pippin suspect that he sometimes visits with the Elves.
Time flies, and as Frodo approaches fifty, the rest of the neighborhood notices that he (like Bilbo) doesn't seem to be aging much. Very curious.
As time goes on, Frodo finds increasing numbers of Dwarves using the ancient East-West Road to seek refuge in the West; they carry news of an enemy who has been building up the old strongholds to the South in the evil land of Mordor.
On top of all this, Orcs are also growing more and more numerous, and they are carrying new, terrible weapons.
Bottom line: things are starting to go sour in the world outside the Shire.
Nine years after Gandalf's last visit to the Shire, at The Green Dragon inn, Samwise Gamgee is arguing with Ted Sandyman: Sam thinks that Bilbo really did fight a dragon, and that the Elves "are going to the harbors, out away beyond the White Towers" (1.2.25).
Ted replies, "If [Bilbo and Frodo]'s where you get your news from, you'll never want for moonshine" (1.2.29). (Translation: don't believe a word they say.)
Gandalf reappears in the Shire quite suddenly and is welcomed by Frodo to Bag End.
Gandalf tells Frodo that the Ring he inherited from Bilbo "is far more powerful than [Gandalf] ever dared to think at first" (1.2.41). Yikes.
Here's the deal: a mortal who carries one of the Great Rings will never dies. He will start to fade, until he becomes permanently invisible to the rest of the world, but he will always be visible to "the eye of the dark power that rules the Rings" (1.2.43).
It doesn't matter how good or well-meaning you are: if you carry a Ring of Power, you'll eventually be possessed by it.
Gandalf tells Frodo that Bilbo knew nothing of the significance of his ring, but Gandalf suspected something was wrong when Bilbo said he felt "[t]hin and stretched" (1.2.48). Turns out his restlessness was a sign that the Ring was starting to get control of Bilbo.
Gandalf reassures Frodo that the Ring didn't do Bilbo any permanent damage. After all, Hobbits are tougher than they look!
But this doesn't solve the problem of what to do with the Ring now that Frodo has it, especially because the power who created the Ring has just become aware of Hobbits and the Shire.
Frodo doesn't understand any of this. Neither do we, really.
Gandalf demands that Frodo give him the ring and just like that, he throws it into Frodo's fireplace.
Frodo is not psyched about this, so he quickly yanks the Ring out of the fire.
The Ring is quite cool, but it has fiery letters along the band: "One Ring to rule them all, One ring to find them,/One Ring to bring them all and in the darkness bind them" (1.2.74). Eek.
These two lines come from a poem about the Great Rings.
And get this: the Ring in Frodo's hand is the Master-Ring, the One Ring that contains a huge portion of the power of Sauron the Great, the Dark Lord.
Sauron is rising again, and he needs his Ring of Power to make his triumph complete.
There are actually twenty Great Rings:
(1) Three belong to the Elves. These rings were not made by Sauron and are not in his power.
(2) Seven belong to the Dwarves. Sauron has found three of these, and four have been eaten by dragons. Check and check.
(3) Nine of the rings were given by Sauron to selected kings of men. These nine kings "fell under the dominion of the One [Ring], and they became Ringwraiths, shadows under his great Shadow, his most terrible servants" (1.2.82).
(4) And of course, the last ring is the One Ring that Sauron made himself, into which "he let a great part of his own former power pass [...] so that he could rule all the others" (1.2.84).
Sauron lost this Ring a long time ago in a war against the Men of Westernesse and the Elves.
Here's how it all went down: Gil-galad, Elven-King, and Elendil of Westernesse overthrew Sauron when he rose the first time.
Elendil's son Isildur physically cut the Ring from Sauron's hand and put it on himself.
As he marched north across the Gladden Fields with his army, a party of Orcs ambushed them, and almost all of his men were killed.
Isildur jumped into the nearby River Anduin to try to escape, but the Ring slipped from his hand, he became visible, and just like that, he was Orc lunch.
Many ages later, a small group of Hobbit-like people settled on the banks of the Anduin. One of them was named Sméagol, and he had a dear friend, Déagol.
The two of them went fishing in the Anduin one day, and Déagol found something on the riverbed: a beautiful golden ring.
Sméagol insisted that it was his birthday, so Déagol should give him the Ring as a present.
Sméagol strangles Déagol and takes the Ring. Kind of harsh, don't you think?
Quickly, Sméagol discovers that the Ring makes him invisible, and he uses this power to spy on his relatives and find out their secrets. He also starts thieving.
His relations are so disgusted by Sméagol's behavior that they finally kick him out of their hole.
Sméagol retreats to tunnels under the Misty Mountains and vanishes out of history.
If you haven't put it together yet, Sméagol is the same Gollum whom Bilbo met in The Hobbit.
The Ring was willing to stay with Gollum while Sauron was dormant.
But once Sauron started rising to power, the Ring slipped off Gollum's finger at just the right time to be picked up by the next passerby.
That next traveler was Bilbo Baggins, of the Shire: surely the least likely person in all of creation to find the One Ring!
The very unlikeliness of this chance makes Gandalf decide that the Ring coming to Frodo must be fate. Destiny. Kismet.
Frodo resists the whole idea that his Ring could be that Ring. No way, man. No. Way.
Gandalf tells Frodo that he finally managed to track down Gollum, who said that he feels mistreated by Bilbo.
He really, genuinely believes that the Ring was a birthday present, that it was rightfully his.
Gollum also says worrisome things about good friends who will help Gollum get his revenge against Bilbo.
Gandalf believes that Gollum has found his way into Mordor. There, Gollum told "the new Shadow in the South" (1.2.140) all about Bilbo and his home in the Shire.
So Sauron has learned that the One Ring has been found, and he has discovered the Hobbits.
Even now, Sauron is looking for the Shire to track down his treasure. Uh oh. This can't be good.
Frodo freaks out and wonders why Bilbo didn't kill Gollum when he had the chance.
Gandalf scolds Frodo for his lack of mercy: Gollum is pathetic, and it's good that Bilbo didn't murder him just because he could.
Frodo complains about having inherited such a dangerous Ring. We would, too.
He wants to destroy it. Smart guy.
Gandalf tells Frodo to give it his best shot, but Frodo can't even bring himself to let the Ring go.
Gandalf laughs bitterly: the Ring has already grown dear to Frodo.
But it doesn't matter anyway: nothing in the Shire will destroy the Ring.
To get rid of the Ring, he'll have "to find the Cracks of Doom in the Depths of the Orodruin, the Fire-mountain, and cast the Ring in there" (1.2.160). Doesn't sound too tough, right?
Frodo offers the Ring to Gandalf, since he is wise and will know what to do, but Gandalf tells Frodo not to tempt him.
Enough of this back-and-forth: they have to do something, and soon.
Frodo offers to leave the Shire. He doesn't want to bring the danger of Sauron down on his friends and neighbors.
Gandalf is impressed by Frodo's courage, and agrees that he must leave. He suggests that Frodo travel under a false name, Underhill.
Suddenly Gandalf stops, goes to the window, and pulls a young Hobbit up into the room.
It's Sam Gamgee, the gardener. Sneaky little guy has been eavesdropping.
Gandalf threatens to punish Sam for listening in on such a secret conversation, but then he decides, "You shall go away with Mr. Frodo!" (1.2.189).