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Tolkien was drawing from the same well as all the earlier fantasy writers: folklore, myths and legends. What he arguably did was show a direction the field could move in, making the magical more mundane and treating the fantastical elements with a history and depth that made them solid and realistic rather than mysterious and elusive. The first kind of fantasy is still alive and well - see Neil Gaiman, etc - but the second has spawned the modern commercialised epic fantasy genre.
I'm not totally convinced that Tolkien even deserves the credit for that - not a lot of modern epic fantasy feels like LotR, even if it shares some tropes. The pulp tradition feels closer to the modern style, but Tolkien maybe showed there was a market for bulky trilogies, and showed how these short adventure stories could be expanded into epics.
If you define fantasy as that stuff that looks like LotR then you could probably argue that it's all derivative of Tolkien, since if it isn't then it isn't fantasy. Just like the old syllogism beloved of SF fans: SF is crap; this isn't crap; therefore this isn't SF.
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