For in-game purposes hobgoblins are orcs including being subject to the effects of Sting and Orcrist. Their corpses are useful for orc characters since they can be sacrificed to convert altars to the chaotic alignment, as well as the other benefits of same-race sacrifices.
Hobgoblin. Used by the Puritans and in later times for
wicked goblin spirits, as in Bunyan's "Hobgoblin nor foul
friend", but its more correct use is for the friendly spirits
of the brownie type. In "A midsummer night's dream" a
fairy says to Shakespeare's Puck:
Those that Hobgoblin call you, and sweet Puck,
You do their work, and they shall have good luck:
Are you not he?
and obviously Puck would not wish to be called a hobgoblin
if that was an ill-omened word.
Hobgoblins are on the whole, good-humoured and ready to be
helpful, but fond of practical joking, and like most of the
fairies rather nasty people to annoy. Boggarts hover on the
verge of hobgoblindom. Bogles are just over the edge.
One Hob mentioned by Henderson, was Hob Headless who haunted
the road between Hurworth and Neasham, but could not cross
the little river Kent, which flowed into the Tess. He was
exorcised and laid under a large stone by the roadside for
ninety-nine years and a day. If anyone was so unwary as to
sit on that stone, he would be unable to quit it for ever.
The ninety-nine years is nearly up, so trouble may soon be
heard of on the road between Hurworth and Neasham.