Sauron, without a doubt, was the mightiest spirit to dwell in Middle-earth. It is written in the Silmarillian he is the greatest of all the Maiar. So much so, the Vala sent five other Maiar (the Istari) to keep the Great Darkness at bay in Middle-earth. In addition, second to him in power, were the Balrogs - also Maiar, but corrupted by Morgoth. Obviously, Gandalf defeated a Balrog, which automatically illustrates he is equal in power. Saruman would have similar power, if not greater, so I would group him in there somewhere at the top.
To say Sauron had no real power is far-fetched. It took an army led by Celeborn, Galadriel, and Saruman to make Sauron consider fleeing Dol Guldur back to Barad-dur and that was when he was in his weaker, necromancer form. By the time of the War of the Ring took place, he was easily more powerful than any living being in Middle-earth, with the exception of Tom Bombadil. However, the only real chance they had in defeating Sauron himself was destroying the ring of power. The only reason I bring Tom Bombadil into this is because his origin is unclear as he could have been an AWOL Vala for all we know. IMO, Bombadil's power was greater than any other good living being, but maybe not greater than Sauron.
With much of Sauron's power, the Witch-king was very strong, but I would not be willing to bet he could defeat Gandalf. If you think about it, if he was, he would have tried at the gates to Minas Tirith. Gandalf was his single greatest threat and obstacle to winning that battle. Had he smitten Gandalf right there and then, the battle would have been over. WIthout the White Wizard, they would have lost all will and hope to win the fight. I think that Peter Jackson's movies give a warped sense of the hiearchy of the characters, especially with The Hobbit movies. I do love the movies, though.
I think people bring up an interest point about Shelob. Ungoliant dwelled with Morgoth, a Vala, and become so powerful that even he feared her. Her offspring could certainly be more powerful than a Maiar, but with her defeat to one Samwise Gamgee it is hard to say. I just don't see Samwise defeating any other person of power that would make my list, so I just can't include Shelob. Not to mention, Samwise used powers provided by Galadriel to defeat Shelob...probably couldn't have done it without.
With that said, I would go in this order as top ten:
Sauron (greatest of all the Maiar)
Tom Bombadil (possibly a greater Maiar or Vala but uncertain)
The 5 Istari (Maiar wizards sent by the Vala)
Balrog (great Maiar)
Galadriel (immortal Elf)
Celeborn (immortal Elf)
Edited by Gunny_J, 11 February 2014 - 12:48 PM.