During the journey to Lonely Mountain, Bilbo Baggins was captured by the Goblins of Goblin-town together with the Dwarves of Thorin and Company. They were brought before the Great Goblin, who accused them of spying, and was enraged when he found out that Thorin was carrying Orcrist, a sword the Great Goblin remembered from Gondolin. With the help of Gandalf, the Great Goblin was slain and Bilbo and the Dwarves escape, pursued by force of Goblins.
Portrayal in adaptations
In both Rankin/Bass' The Hobbit and David T. Wenzel's The Hobbit, Goblin-town is, like in the book, a set of tunnels and caverns. In the 2003 video game version, is was changed to a giant Dwarven mining complex with many lifts, bridges and train carts to spice up the action of the level.