Maxperson
Morkus from Orkus
They did not. Elves existed and gnome was just another word for elf. He used the word to describe the Noldoli which became Noldo. He dropped the name "Gnome" because the Noldoli were physically elves and not what people in Europe viewed gnomes to be. There was no actual race of gnomes.Typical D&D gnomes did not exist in Tolkein, but gnomes did exist.
Gygax on the other hand, unlike Tolkien, made a race of gnomes to match the European ideal.
Those similarities would be because they were the same raceThere are also some similarities between the Noldor and gnomes; being incredibly knowledgeable and being skilled in crafting (especially with metals and gems).