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Runes was a system of writing based on angular shapes that could easily be carved into wood or stone. Originated and used mainly by northern tribes of Europe such as Anglo-Saxon and the Norse. One theory says that Runes evolved from Etruscan writing, however other quasi-runic scripts in other parts of the world (Rovasziras and Orkhon Script) exist.
Tolkien used both Old English runes to display the writing of the Dwarves in The Hobbit and the Thrór's Map, although his Dwarves were based mainly on Norse. The texts of course are modern English, to display the use of Westron of Third Age.
In the history of Arda, Runes were called Cirth and were invented by Daeron of Doriath to represent Sindarin words. Runes came to be used widely by races other than the Elves, and especially by the Dwarves.