From "Perilous Realms: Celtic and Norse in Tolkien's Middle Earth":
But more lies behind England's distrust of the fanciful and imaginative than religious scruples alone. There is as well something in the English character that responds with discomfort when faced with excess irrationality, or emotional display; and in spite of the eighteenth century's expansiveness and the nineteenth century's sentimentality or growth in children's literature, an ambivalence towards folk and fairy tales continued on into the twentieth century, as though such interests were insufficiently serious, insufficiently adult, or antithetical to Christian belief.
Perhaps as an antidote to this sense of frivolity, to this sense that fanciful stories and fairy-lore belong most fittingly to the nursery (an attitude Tolkien greatly deplored), the Northerness movement in the nineteenth century became more and more focused on the combative and the muscular, that masculine ideal that the English, once again, attributed to the Norse. Though H.R. Ellis Davidson, in Myths and Symbols in Pagan Europe, makes in eminently clear that the Celts were ever as fierce and contentious as the Norse and that the two cultures were far more alike and far more interrelated than generally believed, popular thought (aided by the courtly love of Celtic-based Authurian tales) has saddled the Celts with a milder image and allowed them to be seen as a people whose men are, if not quite effeminate, perhaps less fervently masculine than other northern males.
By the nineteenth century, of course, even England's Norsemen were no longer living as Norsemen. They had long since been assimilated into recognizable English types. on the other hand, the Celts (sometimes referred to as the Celtic fringe) still existed as distinct cultural groups; and these genuine representatives of a somewhat discouraged people were permanent residents and had settled in Britain first. How, then, could the mainstream, centrally placed English continue to see outskirt Celtic regions as backward, superstitious, comically unedified, or (at the very least) less than fully polished, and yet claim kinship with their common British past? Historical distance was the answer, distance and a handy sleight of mind. by focusing on King Arthur and Arthur's Round Table knights (and on the Teutonic elements within these tales), the nineteenth-century English found a means on conferring respectability on Camelot and making it their own. What had once been Celtic was now Arthurian and therefore English - so once fully and fittingly so (in the minds of some) that Arthur's Celtic roots were as good as lost to view.
This, of course, did little for contemporary Celts or for appreciation of Celtic attitudes - though one significant mid-century exception needs to be recognized. In his 1867 On the Study of Celtic Literature, Matthew Arnold made an impressive case for restoring recognition to the Celts, claiming the English would benefit from Celtic "quickness of perception," and that the magic, beauty, passion, and grace to be found in Celtic art could serve to soften England's Germanic hardness and Germanic devotion to fact. However, Arnold's emphasis on Celtic "delicacy," "sentiment," and passionate "melancholy" was too suggestive of that taint of effeminacy and excessive emotionality that most middle- and late Victorians fervently wished to avoid; and in spite of the pre-Raphaelite reinforcement of medieval Celtic themes, and the Irish literacy revival, the Celts retained at best a shaky second place.
True to the prejudices of his time, Tolkien mostly downplays (and sometimes outright denies) his attachment to the Celts. The reviewer who called his Silmarillion manuscript Celtic in name and tone, offended him to the core. Names in the Silmarillion "are not Celtic!" Tolkien responded in 1937. "Neither are the tales" (letters, 26). The strength of Tolkien's reaction may seem surprising, but Tolkien was not alone in reacting as he did. E.R. Eddison, whose works Tolkien read and enjoyed, defended his own literary work The Worm Oroborous even more ferociously than Tolkien did the Silmarillion. "I assure you," wrote Eddison, "that I have graduated in a hard school these 23 years - the school of the Sagas, the most bare rock mountain type of grand epic prose the world has ever seen. Those yelling, slobbering, blubbering, black-lipped, stare-eyed romanticisms of the admired Celt are, I fear, so far alien to my affections that I find it hard to do them bare justice." Tolkien, to his credit, went on to admit knowledge of "Celtic things (many in their original languages, Irish and Welsh)" but then weakens this confession by adding that feels "feel for them a certain distaste: largely for their fundamental unreason." (Letters, 26).
Of the two Celtic groups, the Irish, as always, fare worse. Though Tolkien was a regular examiner for the Catholic university in Ireland, and held an honorary doctorate from this same institution, he writes of finding the Irish language "wholly unattractive" and the "air of Ireland wholly alien," adding however, with characteristic equivocation, that "the latter (not the language) is attractive" (Letters 289 and 219). But even his reaction to the Irish landscape was not always so favorable. In a 1979 transcription of a discussion on J.R.R. Tolkien and C.S. Lewis, George Sayer tells a remarkable story about Tolkien describing Ireland as "naturally evil." he could "feel," Sayer relates, "Evil coming up from the Earth, from the peat bogs, from the clumps of trees, even from the cliffs, and this evil was only held in check by the great devotion of the southern Irish to their religion."