There has been a great amount of debate amongst Tolkien fans concerning what kind of being Tom Bombadil is meant to be. The character does not seem to easily fit into the various orders of beings that Tolkien established. Tolkien himself stated "even in a mythical Age there must be some enigmas, as there always are. Tom Bombadil is one".
However, this has not prevented fans from speculating. Here are some possible explanations:
Tom Bombadil is Ilúvatar (God). This is reinforced by Goldberry’s statement: ‘He is’, calling to mind the response of God when Moses asked his name: ‘I Am that I Am.’ (Exodus 3:14) However, comments made at the Council of Elrond and elsewhere seem to suggest that Bombadil is not as powerful as Sauron, and Tom himself says that his powers do not stretch east of his land. In his letters, Tolkien wrote that “The One [Ilúvatar] does not physically inhabit any part of Ea [the created universe].”
Tom Bombadil is a nature spirit. This would explain his love for his land, and his matrimony with Goldberry, who appears to be some form of water spirit (see bookmark for page 141). He does not seem to be tied to any particular natural feature, so might be taken as a spirit of the land itself – of Middle-earth, or even Arda. This would fit with the titles ‘Eldest’, ‘Master’ and ‘Last’. The ‘Bombadil as nature spirit’ theory is backed up by Galdor at the Council of Elrond: “Power to defy our Enemy is not in him, unless such power is in the earth itself.”
What is Tom Bombadil? - a discussion of Tom Bombadil, and a persuasive argument for him being a nature spirit of Arda.
One more hint as to the true nature of Tom Bombadil was revealed in an early letter from Tolkien to his publisher: “Do you think Tom Bombadil, the spirit of the (vanishing) Oxford and Berkshire countryside, could be made into the hero of a story?” Tolkien was extremely disturbed by the increasing industrialisation, spreading cities and vanishing countryside of England, a theme that will be picked up later in Lord of the Rings.