Dragongirl said:
Really? First I have heard of it. Where did you see that?
<ENGAGE MAXIMUM PEDANTRY>
I believe, though I don't have it in front of me, that in the glossorial index at the back of Silmarillion he uses the word "gnome" in his definition of Noldor, which is the easiest way to find it. But it's all over his work (some of which I've yanked doing a web search), stemming from his Sindarin word for the Noldor. In the Etymologies, he has the following definition for the Sindarin term for the Noldor:
ngolodo "one of the wise folk, Gnome"
ngolodo->noldo
Here's a snippet from an essay of his which appears in one of the HME (History of Middle Earth) volumes about the tiresome "is Glorfindel from Gondolin the same Glorfindel from Book 1?" debate:
This name is in fact derived from the earliest work on the mythology: The Fall of Gondolin, composed in 1916-1917, in which the Elvish language that ultimately became that of the type called Sindarin was in a primitive and unorganised form, and its relation with the High-elven type (itself very primitive) was still haphazard. It was intended to mean ‘Golden-tressed’, and was the name given to the heroic ‘Gnome’ (Noldo), a chieftain of Gondolin, who in the pass of Cristhorn (‘Eaglecleft’) fought with a Balrog, whom he slew at the cost of his own life.
The accent is mine. I have never read the HME, by the way, so the website I got this quote from could have just made it up -- but I'm certain the word gnome for Noldor is used somewhere in the Silmarillion.
</DISENGAGE>
And yet, all that don't matter a hill of beans because your point was totally dead on.

Gnomes in D&D have more in common with the ceramic things one might find in a kitschy garden than with Tolkien (not that I'm saying that they ARE the garden-gnomes in D&D, but they are more similar to them than to Noldor).
AJL