J. R. R. Tolkien's Middle-earth legendarium features dragons closely based on those of European legend.Besides dragon (derived from French), Tolkien variously used the terms drake (the original English term, from Old English draca, in turn from Latin draco) and worm (from Old English wyrm, "serpent", "dragon").
History
The dragons were created by Morgoth during the First Age, when Glaurung first appeared. It is stated in The Children of Húrin that they are great spirits. This means that they must be fallen Maiar (although some of Tolkien's earlier works, such as The Silmarillion, state that they were bred from a corrupted stock; see Glaurung). Dragons were capable of breeding on their own, and in later ages the Withered Heath was purportedly their spawning ground.
Taxonomy
Tolkien designed his own taxonomic system for dragons, based on locomotion and fire-breathing.Some dragons (Glaurung) walked on four legs, like Komodo dragons or other lizards. Other dragons (Ancalagon, Smaug) c
Source:
http://en.wikipedia.org/wiki/Ancalagon