It is believed that the corruption of the Elves captured by Morgoth involved eating the flesh of fellow Elves, therefore losing their immortality and becoming horribly disfigured as punishment.
Goblins are what Tolkien called the Orcs that Thorin and Company encountered in the book The Hobbit. They lived deep under the Misty Mountains in many strongholds, ever since the War of Wrath in the First Age. In The Hobbit, Tolkien described them as big, ugly creatures, "cruel, wicked, and bad-hearted." Tolkien explained in a note at the start of The Hobbit that he was using English to represent the languages used by the characters, and that goblin (or hobgoblin for the larger kind) was the English translation he was using for the word Orc, which (he wrote) is the hobbits' form of the name for them. Tolkien used the term goblin extensively in The Hobbit, and also occasionally in The Lord of the Rings, as when the Uruk-hai of Isengard are first described: "four goblin-soldiers of greater stature".
A clear illustration that Tolkien considered goblins and orcs to be the same thing, the former word merely the English translation of the latter, is that in The Hobbit (the only one of Tolkien's works in which he usually refers to orcs as goblins) Gandalf asks Thorin if he remembers Azog the goblin who killed his grandfather Thror, while in all his other writings Tolkien describes Azog as a "great Orc."
"Orc is not an English word. It occurs in one or two places [in The Hobbit] but is usually translated goblin (or hobgoblin for the larger kinds)"
—J.R.R. Tolkien, Preface to The Hobbit
Though, he does misuse the prefix hob to mean larger when in fact it would mean smaller.