Complex sentence: The race of Dwarves preferred to live in mountains and caves, settling in places such as Erebor (the Lonely Mountain), the Iron Hills, the Blue Mountains, and Moria (Khazad-dûm) in the Misty Mountains.
Split into simpler sentences: The race of Dwarves preferred to live in mountains and caves. Among the places where they lived were Erebor the Lonely Mountain, the Iron Hills, the Blue Mountains, and Moria or Khazad-dûm in the Misty Mountains.