MMORPG.com:

I’ve heard the timeline for the game has been changed. Can you tell us when/where we are when we log into the game?

Jeffrey Steefel:

Our current plan is to begin the timeline roughly when Frodo leaves the Shire (from Crickhollow in Buckland).

Where you begin depends on which race you belong to; the four races have different starting points and different newbie experiences. Human characters will begin their stories in the town of Archet, outside of the Chetwood Forest. The starting points for the other races are still unannounced.

The simplest answer is that the launch version of the game essentially happens during the time of the first book, and then will expand beyond there after launch.