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The History of Iceland 

Verified Expert

What is the history of Iceland? When did people first arrive on the island? How was the country formed?

How did Iceland become the modern republic it is today? How did the country's geography, climate and position in the world affect its development, and what were some of the most positive and negative chapters in Iceland's history? Read on to discover the many oddities contained within the history of Iceland. 


Today, Icelanders stand at the precipice of a new, exciting and divisive chapter in their young country’s history. With millions of visitors discovering Iceland each year, an ongoing flow of immigration, and the urban development that goes with both trends, the Iceland of yesteryear is coming to a swift close… like it or not.  

Already, the city of Reykjavík has taken on a new face. What once resembled an overgrown Scandinavian village has given way to the hurried construction of luxury hotels, visitor centers and tourist stops. Only a few decades before that, it had become subject to the modernism that followed WWII—the theatres, the restaurants, the museums and the bars. 

Such transformative makeovers have only occurred in the capital a handful of times, but today, in 2018, the renaissance is all too clear. 

Iceland on the carta marina by Willem Blaeu.Photo from Wikimedia, Creative Commons, by Willem Blaeu. No edits were made.

Quintessential Icelandic streets such as Lækjargata and Laugavegur have begun to resemble nothing like what they once did with the inclusion of glassy hotel fronts and lively souvenir shops. This is not a bad thing unto itself, only a visible reminder that the future is ever encroaching upon us. Every day, it seems, this city, this country, this population, progresses... 

What was it Dorothy said? “We’re Not in Kansas anymore.” The same could easily be applied to Iceland, a country that knows a thing or two about the rapid growth 

Such development would seemingly imply that this once isolated, North Atlantic island now holds a prominent position in the psyche of international travelers. Holidaymakers, business people, artists, musicians, students, job-seekers—in recent decades, all types have found Iceland to be a land of plentiful opportunity. So too have many noted a country still grappling with its place in the world, still trying to figure out exactly what it is, and how it got here...

An old map of Iceland shows the ship slightly off!Photo by Wikimedia, Creative Commons, by Olaus Magnus

Tourism has been the saving grace of the Icelandic economy, an economy that was in freefall during the 2008-2011 banking crisis. Now, having not only fiscally recovered but outmatched the GDP of previous years, Iceland’s future has never looked brighter, never more open to investment, interest and international cooperation. 

But how did Icelanders reach this unique and monumental moment in their national timeline? To face the challenges of the future, residents here will have to look back on this country’s fascinating history, from its early settlement to its declaration of independence after the Second World War, as well as the contentious and influencing years that followed.

The Formation of Iceland    

Iceland is an incredible country formed by volcanoes and glaciers.

Iceland first began to form approximately 70 million years ago. A large magma pocket which, today, sits beneath the island, is thought to have been the catalyst that began this process.         

This magma pocket is known as the “Iceland Plume”, its origins thought to lie over 2000 meters inside of the Earth’s mantle. Long before the dawn of mankind, this plume caused a series of underwater eruptions that quickly began to sculpt the island we know today.

In the contemporary landscape, these same forces can still be seen in the event of volcanic eruptions or earthquakes. To exemplify this point, the island of Surtsey, in the Vestmannaeyjar archipelago, was created from 1963 to 1967 due to such underwater volcanic eruptions. Today, Surtsey is classified as a protected reserve, with only the academics studying it allowed to set foot on the island. 

Iceland’s position in the middle of the Mid-Atlantic Rift makes it a hotbed for geothermal activity and is still the major reason as to why Iceland boasts over 200 different volcanoes, geysers and volcanic fissures.

An eruption at Holuhraun lava field.

Not only will visitors here have multiple opportunities to visit these, they will also catch a rare glimpse of the exposed North American and Eurasian tectonic plates, moving apart every so slightly (1 millimeter a year) at Þingvellir National Park, the country’s only UNESCO World Heritage site. 

And whilst it is simpler to consider these elemental forces something long forgotten to history, the truth is, Iceland is still very much experiencing growing pains. Consider the ice-capped volcano, Eyjafjallajökull, which erupted after a 200-year silence in 2010.

After centuries of building pressure, Eyjafjallajökull’s eruption would go on to shape Iceland’s future, causing an enormous ash cloud that halted air traffic over mainland Europe whilst simultaneously triggering the country’s burgeoning tourist industry. This is in itself is a strange dichotomy considering the eruption also resulted in the cancellation of 107,000 flights.

Though less consequential, there have been countless other eruptions and earthquakes over the years. Take Holuhraun lava field, for example, where eruptions originating at Bárðarbunga stratovolcano occurred in 2014-2015.

Another eruption occurred at Grímsvötn volcano in 2011, and even last year, 2017, the Icelandic population watched carefully as the ground beneath Hekla began to show signs of an upcoming eruption.

The Settlement of Iceland               

Ingolfr Arnarson arrives in Iceland.Photo from Wikimedia, Creative Commons, by Johan Peter Raadsig

What we know of Iceland’s earliest settlers can be largely traced back to the Landnámabók, or the “Book of Settlements”, a five-part medieval manuscript that tells the story of the Norsemen discovering and settling the country in the 9th and 10th century.

Given its staggering age, the Landnámabók provides incredible detail regarding this period, presenting over 1400 settlements and 3000 characters, anecdotal tales, family trees and stories of the Norse Pantheon.

The Saga academic, Sigurður Nordal (September 14, 1886 - September 21, 1974) described this medieval literature as follows: “No Germanic people, in fact, no nation in Northern Europe, has a medieval literature which in originality and brilliance can be compared with the literature of the Icelanders from the first five centuries after the settlement period”.

The sagas were filled with ancient tales of warriors, slaves, farmhands and Gods.Photo from Wikimedia, Creative Commons, by the Arni Magnusson Institute

Thankfully, the Icelandic language is largely unchanged from that of Old Norse, meaning they are just as accessible today to native speakers as they were nearly 1000 years ago. 

Again, contemporary Icelandic names are shared by the earliest settlers, providing a true, inter-generational connection. Modern Icelanders know the sagas and their colorful characters like the back of their hand, having been taught the sagas throughout their childhood, both at home and in school.

Who Were the First Settlers?           

Norsemen arriving by boat to Iceland.Photo from Wikimedia, Creative Commons, by Guerber, H. A. No edits made.

The Landnámabók refers to Irish monks, known as ‘the Papar’, as the first inhabitants of the island, having left behind books, crosses and bells for the Norse to later discover. This is just one example of the level of detail found in these medieval sources. 

They are also referred to in the Íslendingabók ("Book of the Icelanders") by Ari Þorgilsson as “wandering Christians” who departed the island because of their dislike for the “northern heathens”. Both examples seem to insinuate that the Papar had set up and abandoned residency prior to the official Settlement Age.

Iceland was given its name by a Scandinavian sailor, Flóki Vilgerðarson after he spotted some drift ice in the fjords during an especially brutal winter. Hrafna-Flóki (Flóki of the Ravens), as he is called, was the first Norseman to deliberately set sail to Iceland. His story is also told in the ancient Landnámabók.

Settling Iceland began with the adventures of three explorers.Photo from Wikimedia, Creative Commons, by Furfur. No edits made.

Ingólfur Arnarson is credited as Iceland’s first permanent settler, though he also arrived at the island with his brother-in-law, Hjörleifr Hróðmarsson, later killed by his slaves after settling at Mount Hjörleifshöfði, just east of modern-day Vík. 

As legend has it, Ingólfur threw overboard two carved pillars and pledged to settle wherever they landed. In due time, the pillars were found in current-day Reykjavík where he settled with his family in the year 874. 

Norwegian chieftains followed Ingólfur en masse through the next few decades to escape the heavy-handed King Harald of Norway, and in about 60 years, Iceland was fully settled. By 930 AD, it is thought that all arable land in the country had been settled.

Before the long period of growth, Iceland would soon experience, the settlement had grown so large that a new legislative body was in order; the ruling chiefs, therefore, established the Alþingi, which is believed by many to be the world’s oldest nation-wide parliament. 

Life in Early Iceland & the Adoption of Christianity            

A traditional Icelandic turf house, as adopted from the 14th Century onward.

Around the time of the first settlers, it is suspected that approximately 40% of Iceland was covered with natural birch wood forests. This percentage was quickly depleted by the new arrivals who were quick to use the material for constructing ships, homes and farmsteads. 

Trees that were not used for building were burnt for warmth. Within a century, it is thought that Iceland was entirely deforested. This would have consequences regarding soil arability that has lasted to the present day.

Up until the 14th Century, traditional Viking longhouses were built by the early settlers. Afterwards, due to a lack of timber, Icelanders held on to a tradition of building Sod houses, otherwise referred to as an Icelandic Turf House, a type of dwelling built by cutting two rectangles of sod, then piling them into the home’s interior walls.

Iceland was once covered by forests.

This left enough room for windows and doors, but these residencies were rarely warm and required great fires in the center of the room, often causing respiratory problems, roofing was often turf as the home was built into the hillsides, and they frequently had to be repaired due to rain damage.

In order to sustain life in Iceland, it was a necessity for the early inhabitants to trade with the outside world. Whilst Iceland was abundant with certain provisions—i.e. poultry, cattle, sheep, horses, pigs and, of course, fish—the people still lacked many of life’s essentials and luxuries.

Trade was normally undertaken on short routes to neighboring Scandinavia and Europe as Iceland’s merchants were primarily farmers and thus could not afford to spend too much time away from their major source of income. 

From Greenland, Icelanders would import walrus ivory, fur and skins, whilst from Byzantium, they acquired such fine things as gems, silver, jewelry and wine. England provided early Icelanders with wheat, tin, honey and barley, whilst Russia and the East Baltic region offered up amber and slaves in equal measure.

For a time, the Icelanders held onto their belief in Norse mythology, following a lineage of an oral tradition that spanned back to the time of their ancestors in Scandinavia. However, when Olaf Tryggvason ascended the Norwegian throne in 995 AD, he decided to focus his efforts on converting those under his rule.

The battle of ideas between Pagans and Christians was solved diplomatically in Iceland, in stark contrast to the rest Scandinavia.Photo from Wikimedia, Creative Commons, by Haukurth

Iceland fit this category at the time, and so Olaf sent across a number of missionaries with only partial success. In 999 AD, after another unsuccessful conversion attempt, Olaf shut off all trade routes to Iceland, refusing the Icelandic merchant vessels entry to Norwegian ports.

To avoid civil war, the pagan lawspeaker Þorgeir Þorkelsson was elected to decide whether Iceland should or should not become a Christian country. Thorgeir was chosen for his reputation as a reasonable man who could act as a peaceful mediator between both sides of the debate.

After deliberating for one day and one night under a fur blanket, Thorgeir finally concluded that Iceland should adopt a new faith. To mark the occasion, he brought his pagan idols to a waterfall and threw them in the abandonment of faith. This waterfall, Goðafoss (“Waterfall of the Gods”), is a popular visitors’ attraction in Iceland today.

Goðafoss, the Waterfall of the Gods.

Þorgeir stipulated that pagan worship would still be allowed in private, as well as the “exposure of surplus children” (infanticide—Icelanders believed the island could only hold so many people) and the consumption of horseflesh. These directly went against the teachings of the church but were ingrained cultural habits in the Icelandic population. Once the church garnered full control in Iceland, all of these practices were rapidly banned.

The Age of Sturlungs              

In the 13th century, a civil war is known as the Age of the Sturlungs gripped Iceland. Beginning in the year 1220, this strife saw powerful Icelandic chieftains (Goðar) battle it out over whether Iceland should become a subject of Hákon the Old, King of Norway. This period of conflict is named after the Sturlungs, a powerful family in Iceland at that time.

Snorri Sturluson was the chieftain of the Sturlung clan and a vassal of the Norwegian king, as was Snorri’s nephew, Sturla Sighvatsson. Whilst his uncle is more famed as a Saga writer, Sturla would make a name for himself aggressively warring with rival clans who refused to accept they were subject to the Norwegian monarch. This culminated in the  Battle of Örlygsstaðir—the largest known battle in Icelandic history—where Sturla was soundly defeated. 

In the following years, however, skirmishes continued to erupt, and the Norwegian king was nothing if not persistent in stirring up trouble. Gissur Þorvaldsson, himself a chieftain and one of the former opponents of Sturla, was made a Jarl by the Norwegian king. Gissur did much to push the King’s efforts, and finally, in 1262, the Gamli sáttmáli ("Old Covenant") was signed.

This agreement ended the Icelandic Commonwealth and the island became a vassal of the Kingdom of Norway. One century later, Iceland would be granted to the Danish. Denmark’s Christian III challenged the open religious practices of Icelanders and imposed Lutheranism on the people, and to this day, most religious Icelanders remain Lutheran. 

The Laki Eruption & the Mist Hardships            

Disaster struck Iceland with the violent eruption of the Laki volcano in the 18th century, beginning June 1783 and ending February 1784, killing 9000 Icelandic citizens. This eruption was known as Skaftáreldar ("Skaftá fires"). Even more troublesome, the lava wiped out almost all of the nation’s livestock, estimated at 80%, bringing a famine that killed as much as a quarter of Iceland’s population. 

“This past week, and the two prior to it, more poison fell from the sky than words can describe: ash, volcanic hairs, rain full of sulfur and saltpeter, all of it mixed with sand.

The snouts, nostrils, and feet of livestock grazing or walking on the grass turned bright yellow and raw. All water went tepid and light blue in color and gravel slides turned grey. All the earth's plants burned, withered and turned grey, one after another, as the fire increased and neared the settlements”.

This period of starvation, one of the worst the civilized world has ever experienced, is known as the “Mist Hardships” in English, Móðuharðindin in Icelandic. As starvation set in and the weather patterns began to take a life of their own, social order in Iceland broke down and looting became a frequent occurrence. 

Aside from the prevailing hunger, many would die from either the extreme heat or the noxious gases that filled the air. British cleric, Gilbert White, wrote of the time period:

“All the time the heat was so intense that butchers’ meat could hardly be eaten on the day after it was killed, and the flies swarmed so in the lanes and hedges that they rendered the horses half frantic, and riding irksome. The country people began to look with a superstitious awe, at the red, louring aspect of the sun”.

The 1783 eruption at Laki caused food shortages in France, triggering the country's historic revolution.Photo from Wikimedia, Creative Commons, by Eugène Delacroix

The eruption had widespread consequences outside of Iceland, its influence reaching such far-flung corners as North America, the Sahel of Africa and Europe. Disrupting the monsoon cycles of Africa and India, the eruption caused widespread famine in Egypt (resulting in a loss of ⅙ of the population), and the subsequent poverty and food shortages in France were contributing factors in triggering the French Revolution.

Iceland in the Second World War             

Troops in Iceland in World War 2.Photo from Wikimedia, Creative Commons, by

Iceland finally became a republic on June 17, 1944, when 97% of voting Icelanders opted in favor of independence from Denmark. This vote occurred only four years after Denmark had succumbed to the invading German Army, a position that had left Iceland, a neutral country, in a rather precarious position in the years preceding its own illegal occupation. But was Iceland ever at threat from the Axis in the first place? 

First of all, it should be understood that Iceland’s position on the globe is one of enormous strategic importance for any party engaged in international warfare. For one thing, Iceland is positioned directly between mainland Europe, to its east, and North America, to its west, and looms over the Atlantic Ocean.

This is a highly advantageous spot for tacticians who understand that, effectively, whoever operates military bases in Iceland, be they ports or airfields, has dominion over sea and air traffic in that wide and vulnerable stretch of ocean, as well as easy access to both landmasses.

The Icelandic Police training to become the Iceland Defense Force.Photo from Wikimedia, Creative Commons, by Oxyman

In the early 1930s, however, the Third Reich had shown little interest in taking Iceland, though Allied forces found that this position quickly changed after the onset of war, especially following Operation Weserübung, the Axis invasion of Norway and Denmark. 

Britain, in particular, felt that this threatened their control of the North Atlantic, and quickly telegraphed the Icelandic capital asking them for their support as “a belligerent and ally”. So too did Britain want to build their own bases in Iceland as a means of strengthening their North Patrol. Reykjavík responded confirming their neutrality.

The next day, April 10, the Althingi declared that Denmark was incapable of fulfilling its duties supporting Iceland and thus transferred all powers to the domestic government. Two days after, Operation Valentine saw the British invade the neighboring Faeroe Islands. It was a sure sign of the events to come...

On May 6, British prime minister Winston Churchill made a case to the war cabinet that building military bases in Iceland was an essential step in preemptively denying the country to Axis forces. He argued that further diplomatic efforts with the Icelandic government would likely reveal British invasion plans to the Germans, hence it was a more strategic move to invade without any prior warning.

British Prime Minister, Winston Churchill, walking down a street in Reykjavik.Photo from Wikimedia, Creative Commons, by USMC Archives

There was little fear such an operation could fail. After all, the Icelanders had no standing army and there would likely be only a handful of German resistors. On 3 May, the British Under-Secretary for Foreign Affairs, Alexander Cadogan, wrote in his diary, “Home 8. Dined and worked. Planning conquest of Iceland for next week. Shall probably be too late! Saw several broods of ducklings”.

The invasion plan, Operation Fork, was conducted haphazardly en route. There were no Icelandic speakers among the invasion force and many of the maps being used had been drawn from memory. 

Fortuitously for both parties, Icelanders spotted a British reconnaissance plane as it surveyed over Reykjavík, giving them advanced notice that the British would be arriving immediately. When the force finally did arrive, the British were surprised to find the Icelanders rather accommodating, even helping the soldiers unload supplies from their ship.  

The HMS Berwick was a ship that ferried Allied troops to Iceland in its defence.Photo from Wikimedia, Creative Commons, by the Royal Navy.

Upon arriving at the German consulate, British forces were relieved to find no sign of resistance. What they did find, however, was a fiery bathtub, midway through burning intelligence documents, and Consul Gerlach angrily protesting that Iceland was a neutral country.

After being reminded that Denmark had too been a neutral country, the Consul was arrested. 62 unarmed German sailors were also arrested after being rescued from the Bahia Blanca, a German freighter that had recently struck an iceberg in the Denmark Strait.

During the war years, the British and Canadian troops in Iceland would eventually fall to the wayside in favor of US Forces. The British had called upon the then neutral United States to take over control of Iceland as their forces were badly needed on other fronts.

Throughout this period, a great deal of development was undertaken, namely the now Keflavík International Airport, Reykjavík Domestic Airport, harbors, hospitals and road networks. Despite the incredibly beneficial economic impact, this action proved to be highly controversial to much of the Icelandic population who continued to protest their neutrality, all the while cooperating with Allied troops. 

Equally controversial was the impact that foreign troops had on Icelandic society. During the heightened years of the war, foreign troops made up 50% of the native male population in Iceland, and local men were quick to notice the infatuation many Icelandic women showed toward these new arrivals.

Troops arrive in Iceland in WW2. Photo from Wikimedia, Creative Commons, by United State Army.

This became known as Ástandið, “The Situation”, where women found to be engaging sexually with foreign troops were accused of prostitution and treasonous activity.

In 1941, it is thought the Icelandic police force was tracking over 500 women, many of whom were sent to ‘institutions’ such as that at Kleppjárnsreykir, West Iceland, where they faced inhumane conditions and solitary confinement. Children fathered by foreign troops were known as ástandsbörn ("children of the situation").

Iceland Declares Independence                

Iceland declared independence in 1944.

The Icelandic constitutional referendum was held in 1944 as the closing chapters of the war began to materialize. Given the fact that Denmark was still occupied by Nazi Germany in 1944, many Danes felt it an inappropriate time to hold such an election, though the move was congratulated by King Christian X of Denmark after the Icelandic population voted 98% in favor for independence. 

According to stipulations in the 1918 Danish–Icelandic Act of Union, the two countries would maintain strong ties, with Iceland still falling under the territorial dominion of the Danish Monarchy. This subjection to the monarchy was later abolished in the same year, and full autonomy was granted, with Sveinn Björnsson serving as the first President of the Republic of Iceland.

Gaining independence meant that Iceland had to reinvent its position on the world stage as culturally separate from the Danish, as well as its relationship with the rest of mainland Europe.

For example, the Icelandic Flag was ratified by law in 1944 and the inherent values of the Icelandic national psyche—i.e. religious expression, the preservation of their language—were collectively agreed upon as the founding principles of Iceland as an independent nation.

Iceland's Thingvellir was the first seat of parliament in the country.

In the years preceding and immediately after independence, a wave of Icelandic nationalism had begun to find its footing in the Icelandic psyche, a cultural invention largely rooted in the Sagas.

This was for a number of reasons, the least of which being that the Sagas are resoundingly unique in the pantheon of worldwide medieval literature. They are neither myth, nor epic, nor romances or folktales, but stories of vengeance, wealth, power and love. 

Jón Sigurðsson ("Jón forseti") bravely led a group of Icelandic intellectuals towards an independence movement, recreating an autonomous Icelandic government. He is credited as the founder of modern-day Iceland and is often referred to as President Jón by Icelanders, even though he was never officially the president of Iceland.

Modern Day Iceland              

Hallgrímskirkja Church was officially founded in 1945.

Despite their national independence, the Americans maintained a presence in Iceland long after the promised date of departure stipulated in the Keflavík Agreement. According to this contract, the Americans would leave Iceland following the war’s end, transferring control of Keflavik Airport in the process. 

However, given the alarming rate that anti-Communist rhetoric entered the mainstream political consensus in the United States, it was decided one-sidedly that their presence should be maintained in order to deter Russian nuclear attacks from the American mainland.

This caused widespread protests in Iceland, to little avail, but did cement in the Icelandic psyche a distrust of widespread foreign intervention, and the willingness to protest policies they considered opposed to the country’s value systems.

The airport was eventually returned to the Iceland Defense Force in 1951, though the US Navy maintained Keflavík Naval Air Station until 2006. As of 2017, it is again the intention of the US military to build a modern airbase on the Reykjanes Peninsula. According to the 1951 NATO Defense Treaty, the United States is responsible for defending Iceland for an undisclosed length of time.

This should come as little surprise; after all, Icelandic society might be moving at a rapid pace, but the country’s strategic positioning above the Atlantic is as important today as it ever has been. So too is the American influence that still lingers in Iceland—even now, it is clear that this is a country of hot dog lovers, cinephiles, rock n’ roll musicians and revolutionaries. 

For the latter half of the twentieth century, unemployment was low, industries were prospering, and life in Iceland was, for the most part, good, save years when the annual harvest proved to be insufficient. In 1949, Iceland joined as one of the founding members of NATO, whilst only a year before, the country had begun to receive Marshall Aid from the United States.

The next decade of significant interest in Iceland is the eighties. In 1986, Iceland hosted the Reykjavík Summit, a meeting between US President Ronald Reagan and General Secretary of the Communist Party of the Soviet Union, Mikhail Gorbachev, regarding nuclear disarmament.

This ultimately unsuccessful meeting of minds—the issues would, thankfully be resolved in the next year—took place at Höfði House, marking a new era. In 1989, Vigdís Finnbogadóttir becomes President of Iceland and the world’s first democratically elected female head of state.

Reykjavik on New Years Eve is a city of celebrations.

In the 1990s, the Independence Party set into motion a drastic reform of Iceland’s economy. As with most major changes, it took some time to acclimate, but the economy began to grow again strongly and swiftly after a brief recession.

Growing at a rate of 4% per year on average, the Icelandic economy diversified its industries as to not be overly reliant on fishing. Iceland joined the European Economic Area in 1994, thus strengthening its position on the international financier’s stage. 

For a short time, Icelanders considered banking to be their new modus operandi, though this proved to be a short-lived, reckless dream in the wake of the 2008-2011 credit crunch. They would have to look elsewhere if they were ever going to recoup the losses accumulated over the years of the financial crash.

As luck would have it, the eyes of the world were already on Iceland, in particular, the dark and spewing ash cloud permeating from it. It was then that various agencies in Iceland, including the government and tourist board, rallied around the concept of boosting the country as a “Must-See” travel destination.

Iceland has quickly become one of the must-see travel destinations worldwide.

Iceland has also been utilizing its resources for green energy production and has built numerous geothermal power plants and dams for hydroelectric power stations. This has had both incredible benefits and detriments to the Icelandic community, sparking an ever-hot debate on the preservation of nature versus the utilization of energy sources. 

The history of Iceland is rich with legend and lore, ranging from the first settlement that was established here over a thousand years ago by Vikings, to the prosperous, liberal and modern Scandinavian nation that it is today. Thanks to a healthy economy and the island’s natural resources, Icelanders are looking forward to a bright and beautiful 21st century. In the meantime, let’s collectively keep our fingers crossed that no volcanic eruption should disrupt that. 

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