Eru Ilúvatar is the supreme being, creator of all existence. Eru is transcendent, and completely outside of and beyond the world. In Quenya (the Elvish language), Eru means “The One”, or “He that is Alone” and Ilúvatar signifies “Father of All”.
Eru first created a group of angelic beings, called in Elvish the Ainur, and these holy spirits were co-actors in the creation of the universe through a holy music and chanting called the “Music of the Ainur”, or Ainulindalë in Elvish.
Eru alone could create independent life or reality by giving it the Flame Imperishable. All beings not created directly by Eru, (e.g., Dwarves, Ents, Eagles), still needed to be accepted by Eru to become more than mere puppets of their creator. The evil Melkor, who had originally been Eru’s most powerful servant, desired the Flame Imperishable and long sought for it in vain, but he could only twist that which had already been given life.
Eru created alone the Elves and Men. This is why both races are called the Children of Ilúvatar. The race of the Dwarves was created by Aulë, and given sapience by Eru. Animals and plants were fashioned by Yavanna during the Music of the Ainur after the themes set out by Eru. The Eagles of Manwë were created from the thought of Manwë and Yavanna. Yavanna also created the Ents, who were given sapience by Eru. Melkor instilled some semblance of free will into his mockeries of Eru Ilúvatar’s creations, the Orcs and Trolls.