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Balrogs are an extremely powerful demonic race of creatures found in J.R.R Tolkien's fantasy series The Lord of the Rings, they are noted as being a race that have undergone heavy changes by Tolkien as he began to alter them from a race that was once numerous enough to be described as "hosts" to beings that "at most" numbered seven at a time.
Another aspect of the Balrog that changed through time was their size and physical nature, with later versions becoming more elemental in nature - fiery and near indestructible (this was the type chosen for the movie, it would appear).
Balrogs were "scourges of fire, ... demons of terror." They were Maiar, originally of the same order as Saruman and Gandalf, but they were seduced by Melkor, who corrupted them to his service in the days of his splendour before the creation of Arda. During the Music of the Ainur, the Ainulindalë, Melkor (Morgoth) began introducing themes of his own design into the Theme of Ilúvatar, causing great discord in the music.
Balrogs were among those spirits near Melkor who attuned their own music to Melkor's theme rather than Ilúvatar's. Therefore, they not only existed before the creation of the world, they also had a part in its corruption.
A Balrog generally took the form of a tall, menacing being roughly in the shape of a Man, having control of both fire and shadow and wielding a fiery whip with several thongs (Gothmog, the Lord of Balrogs in the First Age, used an axe as well). They induced great terror in friends and foes alike. Many who faced Balrogs referred to them as "creatures of fire and shadow" or simply "shadow and flame."
In his published works, Tolkien depicts the Balrog as being barely a shape wreathed in shadow and flame - possibly man-shape, yet greater. Balrogs seemed to encapsulate and project power and terror.
Additionally, they may have been able to alter their body structures on occasions as being seen in the battle between Durin's Bane and Gandalf, when the Balrog fell into a water he could shift himself into something gelatinous. However, it is also possible that this alternate form was simply Gandalf using colorful language to describe what the Balrog was like after having it's flame extinguished and being covered in water.
In the film adaptations, the head somewhat resembles a skull with ram's horns, while being itself wrapped in its flames. Obviously quite a bit of creative license was used, as nowhere in Tolkien literature is the Balrog described in this way, and is much larger than Tolkien ever described. Tolkien described the Balrog being only "several feet taller than an average man", but in Peter Jackson's film adaptation the Balrog stands at least 20 feet tall, towering over nearly all the other characters in the series.
Balrogs were originally Maiar, similar to that of Sauron and Saruman, but after Morgoth's fall into darkness they followed after him and became his demon servants. The creature is reffered to as the Balrog of Morgoth. Morgoth is ultimately the root of all evil in Middle Earth. Gothmog, High-Captain of Angband, was the Lord of Balrogs. During the Fall of Gondolin Gothmog and the Elf Ecthelion fought, both dying when they fell into a Fountain. Another Balrog fought Glorfindel as the Elf protected refugees from Gondolin and they both fell to ruin in the abyss. Most of the remaining Balrogs were slain in the War of Wrath that ended the First Age, though at least one escaped. The demon is encountered in the Mines of Moria, and seems feared by all goblins and orcs that have taken over the tunnels in the mountain.
Durin's Bane lived in the darkness of Khaz-a-dum, known to the Elves as Moria, a deep place of the world, being older and more monstrous than an orc or goblin. In TA 1980 the Dwarves dug too deep for mithril and woke the Balrog. It slew the Dwarf King Durin VI, and the next year Durin's son Nain I. The Dwarves were driven out of Moria. In 2799 at the Battle of Azanulbizar the Dwarf Dain, later Dain II, King of Durin's Folk, when he pursued the Orc Leader Azog to the Gate of Moria and slew him, saw Durin's Bane. He told his father's cousin Thrain II, that Moria could not be taken.
The Lord of the Rings' Encounter
The Lord of the Rings contains only a brief encounter with the demon; this particular Balrog had no true name and was refered to as Durin's Bane or the Nameless Terror. In TA 3019 the Fellowship of the Ring are forced to enter Moria. The Balrog discovers them, scares off the goblins surrounding the fellowship and follows them to the bridge of Khaz-a-dum. The fellowship of the ring make it across the bridge, but Gandalf stays behind, and prevents the beast from crossing, shattering the Balrog's sword. He uses his magic staff to break the bridge, but as Durin's Bane falls into the chasm below, it wraps its fiery whip around Gandalf's legs and drags him down with it. After a long fall, Gandalf and the Balrog crash into a huge underground lake, which extinguishes the flames of the Balrog's body, leaving it severely weakened and forcing it to retreat from the wizard. Gandalf then pursues the beast for several days, chasing it out of the tunnels and onto the highest peak of the mountains of Charadras, where its flames explode back to life. The Balrog is eventually defeated and cast down onto the mountain side, dead.
Balrogs were incredibly powerful creatures. They were amongst the most trusted and oldest servants of Morgoth, and, with dragons, were the most powerful creatures under Morgoth's command, possibly one of the most powerful entities in all of Middle Earth. In Tolkien's later writings, he made note of the fact that there could not have ever been more than seven Balrogs, yet they were able to drive away Ungoliant in what was described as a "tempest of fire". This is all the more impressive considering that even Tulkas was helpless before the Unlight that Ungoliant spewed to cover her escape.
Balrogs' most renowned and feared magics involved the creation or summoning of fiery weapons. In addition, these fallen Maia could ignite and engulf themselves in flames.The extent of their command of magics other than their weaponry is something of a mystery. It is known however, that they possess the ability to cast spells in a similar manner to the Istar, Durin's Bane was able to cast a counter-spell against Gandalf so potent that it overwhelmed a spell he had been using to keep a door closed, and very nearly overwhelmed Gandalf himself.
It seems likely that they cannot be hurt with normal weapons as Gandalf said. Gandalf could fight against the demon because Gandalf himself is a Maia as well and the blade used by him was Glamdring, a sword of Gondolin. Balrog's possessed superhuman strength, durability, stamina, pain-tolerance and flexibility, as they were capable of picking up and throwing a human with one hand. They could also create earthly explosions with just their fists and tails.
1. Fire Sword
2. Fire Whip