The scenes in the movie covered most of Middle Earth. The size of this world could accommodate the five-way team battle.
In the original movies, the Dark Lord Sauron forged multiple rings in an attempt to rule over the whole Middle Earth. He gave the Rings of Power to the leaders of the Dwarfs, Elves, and humans and they would in turn rule their race with the power of the rings, while Sauron created the One Ring for himself that ruled the other rings.
A war between good and evil broke out. The good achieved victory after the sacrifices of many. However, a human high king retained the One Ring due to greed. The One Ring which had its own mind abandoned the king. Many years passed. The ring fell into the hands of a Hobbit, Bilbo Baggins. The Hobbits were fond of an unadventurous, bucolic and simple life and a race that the One Ring couldn’t seduce effectively. Thus, the One Ring remained in peace and Bilbo Baggins obtained a long life due to its power.