The scorched, unpeopled, and almost barren area surrounding Erebor, The Lonely Mountain, during the years it was occupied by the Dragon, Smaug.

Smaug was last of the great Fire-Drakes to trouble Middle-Earth. He took possession of the halls and treasures of the Dwarf King Thror, in TA 2770, and regularly scorched the surrounding land with his fiery exhalations, killing and eating anything or anyone in the area, and gathering all wealth to his accumulated hoard.

The Desolation of Smaug was a vast area, stretching Westward from the mountain, almost to the borders of Mirkwood, Eastward to the Iron Hills, Southward to The Long Lake and also far to the North. Close to the mountain, the once prosperous town of Dale had been reduced to blasted and charred ruins. The few survivors fled to Esgaroth on the Long-Lake, and what little vegetation survived was populated only by small creatures unworthy of Smaug’s notice such as the ancient Thrushes, Carc and Roäc of Erebor.

After the death of Smaug in TA 2941, descendants of the Men of Dale, led by Bard the Bowman, resettled and rebuilt the town, restoring vegetation and wildlife, and by the time of the War of The Ring in TA 3018 little evidence remained of the Desolation of Smaug.
Encyclopedia entry originally written by PotbellyHairyfoot