According to the creation-myths of Tolkien's books, The One (God) created the world, blah blah blah, and a race of immortal beings called the Valar to act as Guardians of the World. People were created, of different types: Tall, magical Elves; short, strong Dwarves; child-sized Hobbits; and Men.
One of the Elves living in the land of the Valar (The Undying Lands, or Valimar) was named Feanor, and was a master of crafts. He captured some of the Light from the two Eldest Trees, which illimunated the entire Undying Lands with their beautiful radiance; he placed this Light into three jewels of unsurpassed beauty, called the Silmarils. (The Silmarillion book talks all about this.)
There was one of the Valar called Morgoth ("the Dark Enemy") who turned evil and after destroying the two Eldest Trees and plunging Valimar into near darkness stole the Silmarils and fled from Valimar to Middle-earth (the world's main continent.)
In Middle-earth, he gathered strength; for just as he was a source of great evil himself, he drew evil beings to him.
One of those evil beings was Sauron, who became his highest servant. After Morgoth was destroyed (with the direct intervention of The One), Sauron fled and became the main source of evil in Middle-earth. Not until his Ring was destroyed was Sauron eliminated as a threat to all goodness in the mortal lands...