Lake-town was a settlement of men on Long Lake, and was built entirely out of docks that could be separated if necessary. This design made it easy for the Lake-men to catch trade goods that were sent down the River Running by the Elves of Mirkwood.
The Lake-men's main appearance in Tolkien's works comes in The Hobbit, when Thorin and Company escaped from Mirkwood by stowing away in barrels and floating down the river. The Dwarves entered the town and were welcomed generously. The Dwarves stayed in Lake-town for a few days, and then made their way towards the mountain. After Bilbo Baggins accidentally caused Smaug to assume that he was a Lake-man, the dragon became full of rage and flew off to destroy Lake-town. The dragon attacked Lake-town and proceeded to burn it until he was killed by a Black Arrow shot by Bard, who held his ground with a few loyal men while everyone else, including the town leader, fled.
Once Thorin and Company realized that the dragon wasn't coming back, they moved into the mountain and held it. Meanwhile, the elves of Mirkwood had been building up an army to go and claim some of the hoard left by Smaug; also the goblins of the Misty Mountains also had built an army to avenge the death of the Great Goblin. The Dwarves of the Iron Hills led by Dáin Ironfoot also massed an army to save Thorin and regain the Lonely Mountain for the Dwarves. The Lake-men gathered what men they had left and joined the Elves in front of the gate, hoping to get some of the treasure in order to rebuild the town. The Dwarves, Elves, and Men met and were about to do battle when Gandalf arrived and alerted them to the host of goblins. The three races, along with the help of the great eagles, united to combat the massive goblin army. When the battle was over, the coalition had won the day and the Dwarves had regained the Lonely Mountain, the Lake-men received a share of the treasure, which they used to rebuild their town.
Bow: Many of the Lake-men present during the onslaught of Smaug attempted, in vain, to shoot him down with arrows. Bard the Bowman is well known for his skill with the bow, as demonstrated when he brought the dragon down with the Black Arrow.
Long Swords: It is cited in The Hobbit that some of the Lake-men fought the Battle of Five Armies with “long swords”.
“The dwarves [...] wielding their mattocks, upon the other side; and beside them came the men of the Lake with long swords.”