Friends who have been enjoying 'Lord of the Rings: Rings of Power' said I should give the show a proper go. I'd initially tried and abandoned it but at their request I'll do a careful watch and review. My initial impression is that it's reasonable fanfiction but a poor adaptation. "Fanfiction is when someone takes either the story or characters (or both) of a certain piece of work, whether it be a novel, tv show, movie, etc, and create their own story based on it." ('Fanfiction', Urban Dictionary) An Adaptation, on the other hand is a reproduction of a story in another medium (Watership Down the novel, Watership Down the film) or in the same medium but with a new artist (Ben Hur, 1959 vs Ben Hur 2003). Faithfulness to the source material is the key to distinguish an adaptation from fanfiction.
Fanfiction, has a negative reputation, a form of amatuer indulangance ('Fanfic', TV Tropes) but it's a legitimate art form. Fanfiction has way more freedom interacting with the source material, for example the same characters in a new world, different chracters in the same world or entirely new characters in an unexplored or under-developed part of the original world, plus many more variations. An adaption on the other hand is a type of translation, a re-presentation of the original source material. The demands are higher, because the adapting artist is attempting to re-create the original source material.
You can see this difference between adaptation and fanfiction clearly, when you compare the film Noah (2014) with the TV show The Chosen (2017-). Noah is fanfiction, while The Chosen seeks to follow the Biblical narrative closely. The Chosen therefore has a higher standard of success, it is measured against the source material. So faithfulness to the source material is the first benchmark for an adaptation. A skilled artist will be able to make changes to the source material that suit the new medium without sacrificing much of the source material. (You see this in the later Harry Potter films.) Good art is a balance of nostalgia and novelty, and so a skilled adaptive artist will use aspects of the new medium to illuminate and deepen our interest in the original source material.
So is 'Lord of the Rings: Rings of Power' fanfiction or an adaption? The evidence seems clear that the creators intended it to be an adaptation. The Vulture says "Appendix B offers a slim timeline of the major events of the era, which leaves room for televisual reinterpretation; the series also compresses events for ease of adaptation. ... Their development process was a bit like studying a religious text: They welded together a narrative from heavy close reading, deduction, and in cases where the text is silent, careful, Tolkien-scholar-supported flights of fancy." ('Close-Reading Lord of the Rings with the Creatives Behind The Rings of Power', The Vulture) Therefore our first evaluative question is how successfully has the secondary world Tolkien created, been translated into Television by the Amazonian artists McKay and Payne?