Tolkien's original vision was to create a mythology for England, which by quirk of history had none remaining. Even the Legend of King Arthur was a repackaging of French, Germanic, and pagan myths (and Legend is NOT Myth!). After the Norman Invasion in 1066 by William the Conqueror, whatever native mythology that the British Isles may have had was seemingly obsoleted by the infusion of new memes from the continental mainland, and the resulting cultural vacuum persisted for a thousand years, waiting for Tolkien to fill.
It is important to keep the definition of mythology in mind :
mythology : A body or collection of myths belonging to a people and addressing their origin, history, deities, ancestors, and heroes.
The boundary between history and mythology is diffuse - shrouded by time. These concepts exist at two ends of the same (temporal) axis. As such, the old axiom that "those who do not learn history are doomed to repeat it" also applies to mythology, because mythology has been filtered by time so that the central lessons - the themes - are dominant even as the details are blurred out.
However, there is a concrete difference between mythology and allegory. Tolkien was aghast at the idea that LOTR could be allegorical, and argued strenously against interpreting his work as such, in the Foreword which appears in every copy:
As for any inner meaning or 'message', it has in the intention of the author none. It is neither allegorical nor topical.
But I cordially dislike allegory in all its manifestations, and always have done so since I grew old and wary enough to detect its presence. I much prefer history, true or feigned, with its varied applicability to the thought and experience of readers.
I think that many confuse 'applicability' with 'allegory'; but the one resides in the freedom of the reader, and the other in the purposed domination of the author.
The essence of allegory is a homomorphism - a one-to-one mapping. The Ring is nuclear power. Sauron is Hitler. Hobbits are the English. Aragorn is Churchill. The disdain that Tolkien had for this kind of decimation of themes to mere analogy is clear in the Foreword, because it takes something timeless and forces it into a very limited temporal window. This destroys the lessons and utility of the themes themselves.
The true themes of LOTR, which are applicable to any time, are these, to name just a few: We are our own worst enemy. Evil within must be defeated before the evil without. Death. The simple heroism of ordinary people. The Pandora's box of technology. The necessity of wisdom. The vulnerability of the wise. LOTR is suffused with powerful lessons that speak to the very core of the forces driving history in the Age of Man. This is why LOTR is timeless and will continue to be applicable, in its own unique way, to every unique reader.
Addendum - I cannot endorse the book, The Tolkien Reader, strongly enough to anyone interested in themes and mythology and the use to which Tolkien put them. This book has the essay, On Fairie Stories, which expands upon Tolkien's philosophy of mythology and his entire concept of "sub-creation", and the short story Leaf by Niggle, which is a demonstration of same. I have also previously reviewed the Extended Edition DVD of Fellowship of the Ring, which has a nice biography on Tokien and discussion of the context of his work. The DVD gives valuable insight into the care with which Peter Jackson strove to preserve the thematic lessons even as he was forced to make changes in plot which were required to translate the book to film. Finally, for those wishing to explore the richness of Tolkien's mythology even deeper, The Silmarillion is required reading - it is the vast submerged iceberg upon which the entire epic that is Lord of the Rings rests, a tiny outcropping.
 That Tolkien was able to construct a mythology out of whole cloth that still retained its power of thematic applicability, without requiring the actual millenia to filter out the themes from the details, is a testament to his genius. LOTR remains as powerfully timeless and applicable as it was when it was first written, whether it be the Great War, WWII, or even the War on Terror.
Tolkien also points out that his concepts for LOTR predated the Second World War, and notes that had the War of the Ring been truly inspired by WWII, the Ring would not have been destroyed but rather used against Sauron to defeat, enslave, and ultimately replace him.