Smials were the hobbit-holes, inhabited by the well-to-do Hobbits, luxurious versions of the simple diggings of old. Their tunnels had rounded walls and branched to other rooms. However suitable sites for these large and ramifying tunnels were not everywhere to be found and many Hobbits lived in wood, brick or stone houses. The poorest, however, went on living in burrows of the most primitive kind with only one window or none.
In real world
"Smial" is a term used by Tolkien fans to refer to divisions of Tolkien Societies.