While Sauron was the Big Bad” in The Lord of the Rings films, the franchise was still filled with all kinds of monsters, terrors and evils. And while dragons, werewolves and Balrogs all made regular appearances, there were things that were far worse. In The Two Towers, Gandalf recapped his fight with the Balrog of Moria by saying, “Far, far below the deepest delving of the Dwarves, the world is gnawed by nameless things. Even Sauron knows them not. They are older than he.” Those “Nameless Things” remain one of The Lord of the Rings’ greatest mysteries, but there are some theories about them.
Many consider the Watcher in the Water to be one of the Nameless Things, and that’s actually a viable theory. After fleeing into Moria, Gandalf said that the Watcher “crept, or [was] driven out of dark waters under the mountains. There are older and fouler things than Orcs in the deep places of the world.” With that, Gandalf seems to be referencing the same Nameless Things that he talked about later. Further evidence lies in the Lord of the Rings books, where the Watcher was far more Lovecraftian and mysterious than the squid-octopus-creature that appeared in the adaptation.
Even with one possibly having made an appearance, no one could say exactly what the Nameless Things were or looked like. The fact that Gandalf called them “Nameless” meant that he wasn’t even sure what they were. That’s significant because Gandalf spent the First and Second Ages in Valinor keeping company with the Valar. And if they couldn’t even name the creatures and teach Gandalf about them, then the monsters were indeed mysterious.
There are a few theories, however, that explain where the Nameless Things came from. The first is that Morgoth created them deep within the caverns of Utumno. Morgoth always sought to create, but everything that he made was evil and corrupted. They were older than Sauron simply because Sauron didn’t serve Morgoth from the beginning and wasn’t in Middle-earth when Morgoth created them. Thus, he wouldn’t have known all of Morgoth’s secrets. Another bit of proof is the Valar didn’t find all of the caverns under Utumno during the War of Wrath, meaning that some of Morgoth’s creations remained hidden beneath the world.
The second theory takes Gandalf’s statement that the Nameless Things were older than Sauron more literally. In order to be older than the Maiar, the Nameless Things must have been created all the way back during the Ainulindalë. During that music, Eru Ilúvatar created the Valar who harmonized to help make Arda. However, Morgoth (aka Melkor) added Discord to the music to terrible effect. In Morgoth’s Ring (Myths Transformed, VII, Notes on motives in the Silmarillion, iii), Christopher Tolkien wrote about that specifically. “Out of the discords of the Music, not directly out of either of the themes, Eru’s or Melkor’s, but of their dissonance with regard one to another – evil things appeared in Arda, which did not descend from any direct plan or vision of Melkor,” he explained. As such, evil things like Ungoliant were created out of discord and entered either Arda or the Void.
A final theory -- based on a prophecy of Mandos -- states that Morgoth will one day return to Middle-earth to commence the Dagor Dagorath, the final battle. During that day, he will unveil the Nameless Things as his secret weapon and hope to conquer Middle-earth and destroy the Valar once and for all. And if that’s the case, then what happened in The Lord of the Rings was only the beginning.