When creating the world of his legendarium, Tolkien endeavored to give it the internal consistency necessary to make it feel real to his readers. As a philologist, he was highly aware of how languages interact and change in the real world and therefore carefully constructed languages for the inhabitants of Middle Earth and its environs which showed both synchronic and diachronic variation. Of course, the stories themselves were written in Modern English (though in the case of The Hobbit and The Lord of the Rings, for examples, imagined to be a translation by Tolkien himself from an original text written in the common speech of Middle Earth contemporary to the events discussed). This means that one of the most obvious places to find his languages in his work is in proper names. By thinking about the way Tolkien integrated his constructed languages and the names of the characters into the historical fabric of his sub-created world itself, one can understand his work better.
Names are important for any writer. One might consider, for instance, the famous example of the name of Hester Prynne's illegitimate daughter, Pearl. As this word is a common noun in English it carries with it many associations which the reader can give to the character (e.g. an item of great value, gem/daughter, brought about by something negative, pain/adultery). Writers can also name their characters after pertinent figures of history, literature, or myth. When writing fantasy and giving characters names that have no resonance in the primary world, as is the case with the majority of Tolkien's characters, the author is freer in the choices of names (there is no pressure to take them from those common in reality). But any name that has no connection to the world of the reader cannot easily convey meaning to the reader. Many fantasy writers are quite glad to embrace the former, excited by the thrill of putting together pleasant sounds alien to their daily speech, without mourning the latter, but this could not be the case for our devoted philologist.
It would be beneficial to consider why Tolkien views names and the act of naming as important in his work by comparing it to other works dealing with magic and myth. In Ursula Le Guin's Earthsea books, for example, magic is done by knowing the true names of things. Every individual thing has one true name, and magic will only work as it ought if everything meant to be affected is properly named in the spell. In this world knowing something's true name gives one the power to control it. Learning these highly-specific names is tedious and unpleasant for the characters. Robert Graves offers another view of the import of names in his work The White Goddess. Though this is not a work of fantasy or even fiction (at least he did not consider it such), it is about myth and mythic language. He tries to show that all Western mythic names (and therefore all mythic figures and rites in pagan Europe) boil down to one mythic system, so all storm gods (and even important male gods who are not really storm gods, like the Judeo-Christian God) come from one figure associated with oak. This can be demonstrated, he claims, not only by ritual similarities but even by their names, which he connects by the presence of a d and l/r.
In Tolkien's world, by contrast to Le Guin, most characters have a multitude of
names which are correct. No one name is truer than any other (unless
the naming is done in order to deceive). The different names reflect
the complexity of the characters (Aragorn is Strider, and therefore a
skilled Ranger, as well as Elessar, and therefore a king) or
interactions with different people's (Gandalf is given a different name
by the various races he encounters). For Le Guin, the naming gives control, but this type of control if antithetical to all of Tolkien's philosophy of sub-creation. Tolkien's naming system also varies greatly from Graves'. Though of course he would agree with Graves that languages evolve and therefore languages that are currently quite different might have a common ancestor (such as Proto Indo-European). After all, he created a tree of the tongues of his world, which have a common ancestor in the language of the Valar. Unlike Graves, however, he appreciated that even related languages were beautiful in their diversity. In addition to this, Graves' folk-etymologizing which claims that superficial similarities mean that words are related is completely unscientific. This is highly tempting but also highly misleading. English much and Spanish mucho look very similar and even mean similar things; however, scientific linguistic analysis of these languages shows that these words are not, in fact, related. This is precisely what annoys Tolkien so greatly when readers of his work try to use superficial similarities between proper nouns in Tolkien's work and real words to gain insight about the meanings of those words. Where Graves forced language and names in particular to suit his own hypotheses, Tolkien's languages exhibit natural linguistic processes found in the real world. These comparisons highlight Tolkien's linguistic philosophy. While Le Guin claims that things have only one name, and therefore the language is static, and that knowing that name gives power over the thing, Tolkien's use of language and naming mirrors the natural world, shows that individuals have multiple facets and relationships, and that naming is an act of relating to something outside oneself in a pleasurable way. Graves also sees names and language as showing relation and as linking to past history and myth, but it is a rather uncomplicated system of relation. Tolkien's languages are much more closely connected to history because they show the effects of multiple events and encounters.
That names for Tolkien are highly relational can be of no surprise considering the precedent for this in the Bible. The reason that Adam gives names to the animals cannot be that God could not think of any. By naming each animal, Adam acknowledges the uniqueness and worth of each, thereby praising their Creator. Similarly, a botanist gives a name to a newly discovered plant species because it is worthy of study, and one might name inanimate objects, a car for example, for the pleasure of the act and the link that it implies between owner and object. God himself gives extra names. Jacob is named Israel, Simon is named Peter. This occurs when He establishes particular relationships with these men, making one the father of his people and the other the leader of his Church.
Just as the giving of a name shows a new relationship or identity, the change of whole languages show the interactions between different peoples. All Tolkien's characters are connected to one another (they are all in the same story) though diverse, which he shows in part through the interconnectedness of his tongues. Seeing this reminds his readers that this is true in their world and that both relation and diversity are beautiful.