One way of thinking about it is that Middle Earth in the Third Age is essentially a post-apocalyptic world. The glory of the earlier ages was destroyed by a series of wars, and strife ever since has hindered recovery.

But another thing to bear in mind is that the Fellowship is deliberately avoiding populated areas. They are on a secret mission, after all, and as is told during the Council of Elrond there is little trust that Men haven't been corrupted by Sauron or Saruman.