In Chapter 1 of The Lord of the Rings: The Fellowship of the Ring, we are given Gandalf's reputation from the point of view of the hobbits. As we see throughout the first chapters, the hobbits are so insular that their view of the world, and their understanding of their place in it, is naïve and childlike. The reputation of Gandalf among them is similar in that it focuses on just the aspect of him that they know.
To the hobbits, Gandalf is a curiosity. They have a vague sense that he is more than a mere man, and they know that the stories of him go far beyond the memory of any living hobbit. However, as the narrator reveals to us, the hobbits have no idea of his labors in the wider world.
Thus, the hobbits lack the awe of Gandalf we see later in the books. In the same vein, they also do not see him as a harbinger of trouble the way other societies do. Rather, they see him as a purveyor of amusements. They are excited to see his fireworks, which are legendary among the hobbits, although they have not been seen in living memory. They do not worry that his presence may foretell darker happenings. At that point, only Bilbo knows that the seemingly kindly and harmless old man is far more than a simple conjuror.