Related Terms: Orcs
In The Letters of JRR Tolkien, a note under Letter 297, "Drafts for a letter to Mr. Rang" says that the word Warg used in the Hobbit and the Lord of the Rings refers to an evil breed of (demonic) wolves.
Wargs were intelligent, evil, wolf-like beasts that orcs used as horses. The orcs would ride them out on their raids and in return, the wargs would get a share of the plunder.
They lived in the northern parts of Middle-earth and they had a form of speech, and could talk together. They were afraid of fire, because it caught on easily in their coats.
Many fought and died in the Battle of the Five Armies, and the Fellowship was attacked by a pack of wargs before they entered Moria.