What is the setting in Chapter 8, “Flies and Spiders”?

In this chapter Bilbo and the dwarves are in Mirkwood, the great forest once known as Greenwood the Great, east of the River Anduin. The wood was once green and glorious, but due to a shadow that has taken over some ancient strongholds, it is now dark and dangerous, save for the realm of the Wood-Elves in the northeast. Gandalf has ridden south on business of his own, leaving the thirteen adventurers to face the wood...

In this chapter Bilbo and the dwarves are in Mirkwood, the great forest once known as Greenwood the Great, east of the River Anduin. The wood was once green and glorious, but due to a shadow that has taken over some ancient strongholds, it is now dark and dangerous, save for the realm of the Wood-Elves in the northeast. Gandalf has ridden south on business of his own, leaving the thirteen adventurers to face the wood by themselves. He warns them not to stray from the path, for the forest is full of tricks and fearsome beasts, but the next day the company spies an Elven feast off in the trees, and they make their way toward the light and the singing. As soon as they make their final approach, however, the party of Elves disappears, only to reappear some distance away. This happens several times, resulting in the company becoming hopelessly lost.

In the midst of this predicament we learn why the chapter is titled “Flies and Spiders,” for the company is attacked by a host of giant spiders who spin the dwarves into their webs, rendering them utterly hopeless. Bilbo, with the Elvish dagger given to him from the Trolls’ hoard several chapters previously, is able to cut through and kills the spider holding him captive. He thus dubs his sword "Sting," before putting on the ring and eventually rescuing his companions.

After the rescue, the company notices that Thorin is missing—he has been taken to the Elvish king Thranduil for questioning.