This seems rather small, considering the importance of the Lake Men in the battle, and the fact that Esgaroth is clearly a town. There are also no surrounding hamlets and farms where people could live; if there had been (and I think we`re told there weren`t) the townsmen would have taken refuge there when their homes were lost. Such a low figure would make it no more than a villiage, and not an especially large one: Bree is certainly bigger and is called (most of the time, as I remember) a villiage. On the other hand, a maximum of 400 people does seem a reasonable estimate for the town pictured in the author`s drawing. I think that even that would make it crowded.

Should I conclude that Esgaroth was in fact exceptionally crowded (which is often true of towns constructed on constricted sites for the sake of defence, although it would have made it quite a sacrifice for them to give up a large house to the dwarves for some weeks); or did Tolkien put some artistic license into his drawing, intending to give a clear impression of what the town was like, and the scene outside with the barrels, but, just as medieval manuscript representations of towns didn`t include everything, Tolkien saw no need to try and cram in every house into the drawing - especially as the human eye doesn`t always see things exactly as they would appear in a photograph anyway?

Or was lake Town really quite as small as that after all?