The Balrog wrought destruction on Khazad-dûm and killed King Durin IV. Though the Dwarves tried to hold on to their home, they were eventually forced to retreat, and Khazad-dûm became the dark and empty shell that would eventually come to be known as Moria, or the Black Pit.
The Dwarves tried to fight but the following year Durin's son Náin I was also slain, forcing the Dwarves to abandon their home for good. After the Dwarves had left, Khazad-dûm gathered dust and stood dark and empty, but for the sinister creature that lurked in the depths.
It was the source of Khazad-dûm's huge wealth, but ultimately its mining was the cause of its downfall. Beginning under the Silvertine, the Dwarves mined ever deeper, and down towards the roots of Mount Caradhras. There they unearthed the Balrog, which drove the Dwarves into exile.
In the following year, Durin's son, Náin I, was also lost, and the Dwarves fled their ancient home. After millennia as one of the richest cities in Middle-earth, Khazad-dûm stood dark and empty, but for the brooding menace the Dwarves had released. In that time it was given a new name, Moria, the Black Pit.
As we know from Jackson's movie and J.R.R. Tolkien's novel, this particular Balrog is responsible for the downfall of Khazad-Dûm, the wealthiest of all Dwarven realms.
The fear of Elves is more spiritual, so the demonic creatures of shadow and flame are unsurprisingly horrifying to them. Legolas doesn't appear to have any hesitation in his actions throughout the films, but it's clear that his blood runs cold when a Balrog appears in the Mines of Moria.
The Balrog killed Durin VI, the Dwarf-King of Khazad-dûm, whereafter it was called Durin's Bane by the Dwarves. Avarice, principally for mithril, drove the dwarves to go too deep and awaken the Balrog.
Though Gimli has no children, he is not the last Dwarf of Middle-earth. After the fall of Sauron, his people continued to thrive in the Lonely Mountain. Gimli made his home in Rohan, in the Glittering Caves of Aglarond, and many of his kinsfolk came with him.
Gimli didn't know about Moria's fate because there had been no communication between Erebor and Moria for 25 years, and the Dwarves were hopeful and did not want to accept failure until there was certain news.
In the end Tolkien stated that there were probably "at most" seven Balrogs: In the margin my father wrote: 'There should not be supposed more than say 3 or at most 7 ever existed. '
For more than five millennia, the Balrog hibernated in his deep hiding place at the roots of the mountains in Khazad-dûm. He remained undisturbed throughout the Second Age and most of the Third, before the mithril-miners of dwarf-King Durin VI awoke him in T.A. 1980.
The only recorded instances of Balrogs having been slain are Gandalf's slay of Durin's Bane, Echtelion's slay of Gothmog and Glorfindel's slay of an unnamed Balrog.
However, in the Tolkien novel, Gandalf actually never knew about the Balrog. All he knew was that Moria had been evacuated because of something called Durin's Bane, and that it still lurks inside. And while he does know that Orcs attacked the Dwarven kingdom, it was many years ago, and so he hoped they were gone.
From TA 2989 to TA 2994, the re-colonization of Moria was an attempted expedition led by Balin to re-take the ancient Dwarven Kingdom of Khazad-dûm. An initial effort was successful in reclaiming some of Moria from the Orcs.
Did the Dwarves retake Moria after the Balrog died?
There's not a lot of information out there on the details of how the Dwarves reclaimed Khazad-dûm, but it undoubtedly required a lot of Orc-slaying. Without the Balrog, Durin's Bane, Durin VII the Last returned to the Mines of Moria and restored it to the once great kingdom that it was.
When Morgoth's defeat was inevitable, the Balrog fled into the tunnels deep within Middle-earth. They were created by the infamous Nameless Things, and they offered a surefire place to stay hidden. And it did, until the Dwarves delved too deep during the Third Age, disturbing its slumber.
According to one theory (via Stack Exchange), Gimli did not know about the fall of Moria in The Lord of the Rings: The Fellowship of the Ring movie due, effectively, to poor communication.
When The Fellowship is taken to Galadriel, she and Boromir have a telepathic conversation which immediately causes Boromir to burst into tears. She senses his desires for the Ring but tells him not to give in because even now, there is hope.
Gimli was born in the Ered Luin in the Third Age, son of Glóin. Gimli had wanted to accompany his father on the quest to reclaim Erebor, but at age 62 he was deemed too young. He was a remote descendant of Durin the Deathless, chief of the Seven Fathers of the Dwarves and ancestor of the Longbeards.
Well, we don't really know how old Legolas is, not in canon. But certainly he is much older than Gimli. But to a dwarf's eyes (and to be fair, our own) he looks younger. And in terms of lifespan, Gimli has lived far more of his own life than Legolas has of his own.
Early life. Born in TA 2879, Gimli was the son of Glóin and a nephew of Óin, both former companions of Bilbo Baggins. He was a descendant of Durin the Deathless, father of the first house of the Dwarven people. Gimli was descended from, but was not a member of the royal line.
Simply put, he was the only one available. There were only two dwarves at the council of Elrond, Gimli and his father Gloin. The Dwarves were fighting Sauron's forces constantly in their own campaign and couldn't spare many. Gloin was also much older now, it was absolutely his son's turn to go on a big journey.
