Western Land

As Bilbo Baggins sat on the 'doorstep' of the hidden Dwarf-door of Erebor, his thoughts wandered back to his home, far away to the west beyond the Misty Mountains. He thought of Bag End under Hobbiton Hill, in a place named as the Western Land. The meaning here is not absolutely clear, but it seems to be a reference to the Shire, the land settled by the Hobbits.

The more usual name for the Land of the Halflings, the 'Shire', does not in fact appear anywhere in The Hobbit, and Bilbo's thoughts of his 'Western Land' are as close as we come to a distinct name for his homeland in that book. The name refers to the fact that it was far away to the west of Erebor, so it seems unlikely that the Hobbits themselves would have used it. The 'Western Land' is capitalised as a proper name, however, and so perhaps this was how the Shire was known in the lands farther eastward. Alternatively, it may have been a more general term for the wider lands westward of Erebor. In context, though, Bilbo seems to be thinking of his own homeland rather than any kind of wider region.