While you could separate the forces of good into different factions based on race(ie dwarfs, humans, elves, trees), you'll be left with each faction really only having like two the three units each and nothing else. The setting is cool and all, but has the same issue with the Witcher and Game of Thrones settings where the setting wasn't directly built to support multiple different factions with varied playstyles.
Lord of the Rings - Honestly, I think this would be a mediocre choice to go with.