What would make Lord of the Rings an allegory would be if to understand it you had to get hold of a key -"Sauron is really Stalin and Saruman is really Hitler and the Ring is the Atom Bomb" and that kind of nonsense.

And there people who tried to talk along those lines, and there probably still are, and it really got on Tolkien's wick, because it devalued the story as such. And he very specifically dismisses such interpretations (and he points out that if he'd been writing anything along those lines relating to troubles of this century the plot would have worked out very differently, and disastrously so).

I think he went a bit too far in rejecting the idea of allegories as a valid type of stortytelling, because there are examples where it works well - notably The Pilgrim's Progress. But even that works best when the story takes over, and the characters come to life, and the allegory is pushed into the background. (And the same goes for CS Lewis's reowrking of that, The Pilgrim's Regress.)

Applicability, or finding analogies in a story, that's a different matter, as he said. And all stories are applicable, or they wouldn't be stories.)

And I think there is a distinction between the use of figurative language and extended metaphors and allegory as such. Songs about sexual encounters in terms of hunting wild game or agricultural machinery, or songs addressed to Ireland in the form of a woman, yes, they are extended metaphors and figurative language, and they make more sense when you know the coded references - but for true allegory I think you'd need a more extended and complicated narrative than you get in most folk songs.

There are ballads which have that kind of extended and complicated narrative structure - but I can't think of any which are allegorical in their nature. They probably exist though.