Neologism is a fascinating subject of new words and new meanings for existing words:
: a new word or expression or a new meaning of a word
Merriam-Webster
The subject is full of vagaries and ambiguities. In 1859, James Hardy published the writing's of Michael Aislabie Denham in The Denham Tracts, which included a long list of supernatural creatures including hobbits:
What a happiness this must have been seventy or eighty years ago and
upwards, to those chosen few who had the good luck to be born on the
eve of this festival of all festivals; when the whole earth was so
overrun with ghosts, boggles, bloody-bones, spirits, demons, ignis
fatui, brownies, bugbears, [items omitted] ... redmen, portunes, grants,
hobbits, hobgoblins, brown-men, cowies, [items omitted] ... and apparitions of every shape, make, form, fashion, kind and description, that there was not a village in England that had not its own peculiar ghost.
Etymonline.com emphasis mine
Obviously, hobgoblins gained more traction than hobbits. Interestingly enough, the word hobbit was also used as a measurement at the time, as mentioned in a tabulated list of produce in the 1853 publication of The Sessional Papers Printed By Order of the House of Lords:
To value of potatoes, consumed by the paupers and officers of the St.
Asaph Union Workhouse, being the produce of the garden (cultivated by
the boys), containing about 1J acre, during the year ending 21th
December 1852
Potatoes in store
Decayed potatoes, about 8
hobbits, at 7s. 6d.
Swedes in store
Cabbage in the garden
Emphasis mine
This usage is confirmed in Francis Hilliard's The Law of Sales of Personal Property in 1841, which also foreshadowed the demise of the hobbit in favor of the bushel:
So where a statute imposed a penalty for buying or selling corn by any
other measure than the Winchester bushel; it was held that no action
would lie for the non-delivery of two hobbits of barley.
Emphasis mine
J. R. R. Tolkien coined the word hobbit--with all of its fictional etymology--in 1955 to denote the fictional characters of his fantasy. But the word had already been introduced into the English language, and its common usage had already been laid to rest. It is quite hard to believe that such an accomplished scholar of words had no inkling of this history, but whether he realized it or not, both the agricultural and spooky connotations of hobbit served his purposes in defining these characters and their place in the story. Although hobbit was not a new word per se, he does get credit for expanding the use of the word hobbit and making it popular once more, which is within the meaning of neologism:
a new meaning of a word
Like hobbit, quidditch and Khaleesi are used commonly, and even included in general references, but none of them are considered nonsense words, a designation reserved for abracadabra, razzmatazz, twaddle and such. Quidditch was a meaningful expression developed in the context of modern English literature, so it seems quite appropriate to call it a neologism. Technically, Hobbit and Khaleesi were borrowed from elaborate fictional languages, but these languages were designed for novels in the context of modern English literature, so it seems quite appropriate to call them neologisms as well.
Communication value establishes the legitimacy of new words and new meanings. I have younger twin sisters who developed their own elaborate language to communicate to each other as toddlers. They talked to the rest of us in their limited English, but we would hear them hiding in a closet under the steps, talking to each other in a language we could not understand. It was gibberish to us, but clearly they were using real words and real syntax to communicate with each other.
Eventually, my mother came to understand a few of their words, and introduced them into our family conversations. Those words meant nothing to other families, but they became real words in our family dialect. One of their private words was geila, which we interpreted as monster. To my lasting shame, whenever I wanted to torture my little sisters I would just snarl, "Geila get ya!" to send them scurrying in terror.
Decades after the twins grew up and abandoned their Cryptophasia, some of their words still have communication value for our extended family. We wouldn't expect to find them in a dictionary, and if we had any reason to use them in public, we would provide a clear explanation of the meaning we intend, but I have unleashed geila on the English language. I wonder, what kind of damage can that monster do?
Small groups of people routinely add words and change the meaning of words for their own purposes. The more broadly those new words and meanings are accepted into the common language, the more valuable they become as communication tools. Dictionaries and other general references offer an objective measure of the communication value of new and old words alike.