According to the Grey Annals in volume XI of The History of Middle-earth, the Dwarves first appeared in the Blue Mountains about 250 Valian Years (that is, just over 2,395 solar years) before the Return of the Noldor, and made their great underground dwellings shortly thereafter.

The Firebeards and the Broadbeams were the two Dwarf-clans associated with the Blue Mountains in Of Dwarves and Men (in volume XII of The History of Middle-earth). Nogrod, then, was presumably founded by one of these two, and the rather scanty evidence marginally favours the Firebeards as its inhabitants.

Nogrod's original name was Novrod, meaning 'hollow dwelling' (hence its translated name 'Hollowbold'). However, as the years passed, the element nov- fell out of common use, and was ultimately replaced by the more common naug, meaning 'Dwarf'.