Tom Bombadil, was technically more of an 'entity' too. You have to remember that Tolkien was actually pretty Christian-centric, though not nearly as much as C.S. Lewis, of course, and most of the truly powerful beings in his world were not really 'human', having transcended that, or never really having been human to begin with. I'm pretty sure Bombadil was meant to be more like a spirit of the forest than simply a druid, though I believe that to begin with he was probably something like a druid. Not sure where I am getting that from, though. I think there is stuff in the Silmarillion, or bk of lost tales. I know that is where I got the name of the Elven Ring of Fire from, and the fact that Gandalf had it.
But I digress, back to the actual thread.
Anyway, my method easily switches you to a low magic world in 3.x with minimal house rules. Simply removing the ability to copy scrolls, and removing the ability to automatically research spells each time you gain a level. Everything beyond that is up to the DM to balance out the levels of CR the party faces, knowing that CRs are not going to translate straight across when the party doesn't have the same access to spells/magic.