The following account of the settlement of Iceland is based on traditional sources written down more than a century after the events took place. Some aspects of it have been called into question. In particular some historians have given more weight to the Celtic stock of some of the original settlers.
Iceland was settled in the late 9th and early 10th centuries, principally by people of Norwegian and other Scandinavian origin, many of whom are believed to have been fleeing the harsh rule of the Norwegian king Haraldur Harfagri (Harald the Fair-haired). This period, from about 874 – 930 AD, is considered to be the initial settlement, even though the island had been settled by Irish monks before the arrival of the Vikings. Little is known about the monks except that they moved away when the Vikings started to arrive.
The first Scandinavian who discovered Iceland was the viking Naddoddr, he was sailing from Norway to the Faroe Islands but got lost and drifted all the way to the east coast of Iceland. Naddoddr named the country SnŠland (Snowland). The Swedish viking Gararr Svavarsson also accidentally drifted to the coast of Iceland. He discovered that the country was an island and named it Gararshˇlmi and stayed for the winter at H˙savÝk. The first Scandinavian who deliberately sailed to Gararshˇlmi was Flˇki Vilgerarson also known as Hrafna-Flˇki (Raven-Flˇki). Flˇki settled for one winter at Barastr÷nd. It was a cold winter and when he spotted some drift ice in the fjords he gave the island its current name, ═sland (Iceland). The first permanent settler in Iceland is usually considered to be a Norwegian chieftain named Ingˇlfur Arnarson. He settled with his family in southwestern Iceland, in a place he named ReykjavÝk (Smoke Bay). This very same place would eventually become the capital of the modern Icelandic state. It is recognized, however, that Ingˇlfur Arnarson wasn't the first one to settle permanently in Iceland — that was Nßttfari, a slave of Garar Svavarsson who stayed behind when his master returned to the mainland.
In 930, the ruling chiefs established a republican constitution and an assembly called the Al■ingi (English: Althing). The parliament convened each summer at Ůingvellir, where representative chieftains (Goorsmenn) amended laws, settled disputes and appointed juries to judge law-suits. Laws were not written down, but were instead memorized by an elected "l÷gs÷gumaur", or Speaker of the law. The Al■ingi is sometimes stated to be the world's oldest existing parliament. There was no central executive power.
Iceland enjoyed a mostly uninterrupted period of growth in its commonwealth years. Settlements from that era have been found in south-west Greenland and eastern Canada, and one viking saga, "EirÝks saga Raua" speaks of the settlers' exploits.
The settlers of Iceland were mostly pagans, and worshipped, among others, Ëinn, Ůˇr and Loki — but in the 10th century political pressure from Europe to convert to Christianity mounted. As the end of the millennium grew near many prominent Icelanders had accepted the new faith. In the year 1000, as a civil war between the religious groups seemed possible, the Al■ing appointed one of the chieftains to decide the issue of religion by arbitration. He decided that the country should convert to Christianity as a whole — but some concessions were made to the pagans during a transitional period.
As the 11th and 12th centuries passed, the centralization of power had worn down the institutions of the Commonwealth, as the former, notable independence of local farmers and chieftains gave way to the growing power of a handful of families and their leaders.
Iceland as a Norwegian and Danish vassal
The Icelandic Commonwealth remained independent until 1262, when it entered into a treaty which established a union with the Norwegian monarchy. The treaty ended the bloodiest period in Icelandic history, which began in 1220 when Snorri Sturluson became a vassal of the Norwegian king, and subsequently his nephew Sturla Sighvatsson also became a vassal in 1235. Sturla used the power and influence of the Sturlungar family to wage war against the other clans in iceland.
Possession of Iceland passed to Denmark-Norway in the late 14th century when Norway and Denmark were united. When the united kingdoms were separated by the treaty of Kiel in 1814, Denmark kept Iceland as a dependency.
Though geographically removed from Europe, Iceland was never isolated. Mariners from many nations — Christopher Columbus perhaps among them — came to call and trade at Iceland's ports throughout the Middle Ages and early modern period.
19th and early 20th century
In the early 19th century, national consciousness revived in Iceland, and an independence movement developed under Jˇn Sigurdsson. The Al■ingi had remained for centuries as a judicial body but was finally abolished in 1800. In 1843 a new body by the same name was founded as a consultative assembly. Continuity with the Althing of the Icelandic Commonwealth is sometimes claimed.
In 1874, a thousand years after the first acknowledged settlement, Denmark granted Iceland home rule, which again was extended in 1904. The constitution, written in 1874, was revised in 1903, and a minister for Icelandic affairs, residing in ReykjavÝk, was made responsible to the Al■ingi. The Act of Union, a December 1, 1918 agreement with Denmark, recognized Iceland as a fully sovereign state united with Denmark under a common king. Iceland established its own flag and asked that Denmark represent its foreign affairs and defense interests.
German occupation of Denmark on April 9, 1940 severed communications between Iceland and Denmark. As a result, the Parliament of Iceland on April 10 elected to take control of foreign affairs into its own hands. During the first year of World War II Iceland strictly enforced a position of neutrality, taking action against both British and German forces violating the laws of neutrality. On May 10, 1940, British military forces invaded and occupied Iceland. The government issued a protest, but if the authorities ever had any thoughts of mounting a defence they were made impossible by the fact that most of the country's police force, including the only officer with military training, was in a training camp some distance from the capital. The government quickly adopted a policy, similar to the Danish one, of collaboration with the occupying forces.
In July 1941, responsibility for Iceland's defense passed to the United States under a U.S.-Icelandic defense agreement.
Following a plebiscite, Iceland formally became an independent republic on June 17, 1944. Since Denmark was still occupied by the opposing forces many Danes felt offended that the step should have been taken at this time. Despite this the Danish king sent a message of congratulations to the Icelandic people.
In October 1946, the Icelandic and U.S. Governments agreed to terminate U.S. responsibility for the defense of Iceland, but the United States retained certain rights at KeflavÝk. Iceland became a charter member of the North Atlantic Treaty Organization (NATO) in 1949 with the reservation that it would never take part in offensive action against another nation. After the outbreak of hostilities in Korea in 1950, and pursuant to the request of NATO military authorities, the United States and Iceland agreed that the United States should again take responsibility for Iceland's defense. This agreement, signed on May 5, 1951, is the authority for the controversial U.S. military presence in Iceland.
Iceland is the only NATO country with no proper military force of its own. It does maintain a police force including a special weapons unit, a coast guard with a small fleet of lightly armed ships and has deployed squadrons of armed peace-keepers wearing military uniforms to Bosnia and Afghanistan.