It's well known that hippies were into Tolkien's work. Some of its themes appealed to them, certainly, but like with Lee and Ditko's Dr. Strange comics, there was also the idea that the works might somehow be drug-influenced. The author, it was assumed, might be taking the same trip as them. This was, of course, a false belief, but it was one that existed.
I this appreciation of Tolkien filtered through 60s countercultural and mixed with the prevalent cultural representations of fairytale fantasy led to a subgenre or aesthetic movement within fantasy, most prevalent in the late 70s and early 80s, before D&D derived fantasy came to ascendancy. While this subgenre likely finds expression in literature and even music to a degree, I think it is most recognizable and definable in visual media. It's evident in works like Bakshi's film Wizards and the Marvel comic Weirdworld (both in 1977), and in the Wizard World sequences (starting in 1979) of Mike Grell's Warlord. Elfquest (1978) shows the influence to a degree. Bodē's Cheech Wizard (1966) and Wally Wood's Wizard King (introduced 1968 but significantly presented in 1978) are either the oldest examples or its direct progenitors.
Essentially, the subgenre eschews the serious world-building of LotR for a more drug-influenced riff on The Hobbit, often with greater use of anachronism, camp, and sexiness, and often with a degree of psychedelia. Beyond the Tolkien influence, these works tend to share a number of common features: a "traditional" visualization of elves and dwarfs as "little people," arising in folklore and classic illustration, but coming more directly from Disney animation and the fairytale comics of Walt Kelly; the influence of Denslow's Oz illustrations or the design aesthetic of The Wizard of Oz (1939); absurdism and humor borrowed from underground comics and Warner Brothers cartoons; unreal landscapes and visually alien settings informed by Sword & Sorcery and science fiction comics rather than historical or mythic sources of Tolkien.
Given they were contemporaries, D&D shows some in influence from these sources, primarily in its early art and occasionally humorous tone. But as a game that arose from wargaming there was always a thread of verisimilitude or equipment fixation that runs counter to this freewheeling psychedelic adventure vibe. Also, the violent, heroic narratives tended to have less room for the silly or less competent characters of psychedelic fantasy works.
