How does Bilbo plan to free the dwarves from the elves, do Lake-men like elves, and why do dwarves cause such a stir in Lake-town?
Bilbo's plan is to use the ring to remain invisible, get the guards drunk, steal the keys, and smuggle the dwarves out in the barrels that are sent down the river.
The Lake men and the Wood Elves have a business relationship, but they do not like each other or trust each other. They just have an exchange of goods.
The dwarves' arrival is so exciting because the Lake men remember when the dwarves lived and worked near them. The men believe that the dwarves will help them gain control again, and get rid of the dragon.
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