I would think, for the most part, that the average inhabitant of any country/village was relatively ignorant of the wider world. Witness Faramir and Boromir: well-educated and connected Lords of Gondor, not having even heard of Rivendell, Imladris, or Elrond before their dreams came to them. It seemed that Denethor was one of the very few who knew something of these names, but even he knew only a vague location, calling it a “far northern dale” (FOTR, The Council of Elrond). If the best educated and wisest of Gondor knew only of Imladris as a far northern dale, how much less would they have known of The Shire, Bree, Dale, or Erebor – all much further away than Rivendell?
And I would venture to say that Denethor and his sons should have been some of the most knowledgeable men of the happenings in the wider world, with their positions of power, education, access to extensive history books, and (in Denethor’s case anyway), a palantir. It would be my opinion then that the average inhabitant of Gondor, Rohan, Dale, Bree, The Shire, etc. would be mostly in the dark concerning not only events in the wider world, but also the existence of specific countries or settlements.
But it is interesting some of the things that were retained through stories, such as Sam’s awareness of Oliphaunts, even if only thinking them a fairy-tale (just as the Rohirrim and Gondorians thought of hobbits as fairy-tale material!). I think it is Tolkien’s love for stories which comes out as story-telling being the medium which best preserves some pieces of history.
"I do not love the bright sword for its sharpness, nor the arrow for its swiftness, nor the warrior for his glory. I love only that which they defend," Faramir in TTT by JRRT.