The official website of Lotro released the reputation system and announced that this system is an optional method of advancement, it is not being implemented to require players to grind in order to gain access to group content.

Official Press Release:

Q: Why are you adding a grind to the game!?

A: Lets call a spade a spade: reputation ladders are a system that encourages you to go out and kill monsters and/or collect objects in large numbers, and they can take quite a bit of time. There are generally going to be faster ways to get serious loot in the game and those of you who prefer grouping may want to give it a pass for the most part but for the portion of the player base who either dont or cant group much of the time Lotro Gold, this sort of gameplay gives them long-term goals they can pursue between their usual quests and activities.

Another advantage of these relatively simple activities is that they can be picked up and put down quickly. Only have 20 minutes to play? No problem; go earn a little reputation before dinner and then log out for some quality family time. For many players with uncertain real-world responsibilities, this can be a much more relaxing style of play, and thats the kind of play-style its designed to support  Lotro Gold.

In practice, it really isnt much different from the Slayer deeds, but it operates via different mechanisms.

Q: Do I have to grind through reputation in order to enter dungeons and play with my friends?

A: In a word: No

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