The history of Iceland

Iceland was one of the last places in Europe to be settled by people. Norse farmers, with the Gaelic slaves and wives they brought from the British Isles, arrived in the late ninth century and created a commonwealth of chieftains without a king, governed by an annual assembly, the Althing, founded in 930. The island came under the Norwegian crown in the thirteenth century and later under Denmark, and for centuries its small population lived by farming and fishing on the edge of survival, struck repeatedly by plague, famine and volcanic eruptions. A national movement in the nineteenth century won home rule, sovereignty in 1918 and full independence as a republic in 1944, after which Iceland became one of the wealthiest countries in the world.

Iceland had no native population. Greek and Roman writers spoke of a distant northern land called Thule, which some have identified with Iceland, though this is uncertain. The first people known to have reached the island were probably Irish monks seeking solitude, called papar in the Norse sources. The twelfth-century historian Ari Þorgilsson wrote that Christian hermits were there when the Norse arrived and left rather than live among pagans. Archaeologists have found a few structures that may date from before the main settlement, including an abandoned dwelling at Hafnir on the Reykjanes peninsula dated to between about 770 and 880.

Norse seafarers of the Viking Age found the island in the mid-ninth century. According to the medieval Book of Settlements, Landnámabók, the first permanent settler was Ingólfur Arnarson, a Norwegian who built his farm at Reykjavík, the "bay of smokes", around 874. Most settlers came from western Norway, many reportedly escaping the growing power of King Harald Fairhair, but a large number also came by way of the Norse colonies in Scotland and Ireland. Genetic studies suggest that much of the female founding population was of Gaelic origin, many probably taken as slaves or wives. Within about sixty years most of the usable land had been claimed, and the population may have reached several tens of thousands.

The settlers cleared the birch woodland that covered parts of the lowlands for grazing and fuel, beginning the soil erosion that still shapes the landscape. They farmed sheep and cattle, grew some barley, fished and hunted seals and birds.

In 930 the chieftains, called goðar, established the Althing, a general assembly that met each summer at Þingvellir in a rift valley east of Reykjavík. A Lawspeaker recited the laws from the Law Rock, and a legislative council and regional courts settled disputes. There was no king, no army and no central executive: judgements had to be enforced by the parties themselves and their allies, which often meant feuds. This system, known as the Commonwealth or Free State, is the setting of the Icelandic sagas.

From Iceland, Erik the Red settled Greenland in the 980s, and his son Leif Erikson reached North America around 1000, landing at a place the sagas call Vinland. In the same year, under pressure from the Norwegian king Olaf Tryggvason, the Althing debated whether to adopt Christianity. The Lawspeaker Þorgeir, himself a pagan, was asked to decide and ruled that all Icelanders should be baptised, while pagan worship could continue in private for a time. Icelanders soon took up writing in the Latin alphabet. The first native bishop was consecrated in 1056, and bishoprics were established at Skálholt and Hólar.

The twelfth and thirteenth centuries produced a remarkable literature in the Old Norse language. Ari Þorgilsson wrote the Book of the Icelanders, and Snorri Sturluson, a powerful chieftain, wrote the Prose Edda, a handbook of Norse mythology and poetry, and probably Heimskringla, the history of the Norwegian kings. The great family sagas, such as Njáls saga and Egils saga, were written down in the following century.

Power became concentrated in a handful of families, whose violent rivalries in the thirteenth century are known as the Sturlung Age. Several chieftains, Snorri among them, became vassals of the Norwegian king Haakon IV, who encouraged the conflicts. Between 1262 and 1264 the Icelanders swore allegiance to the Norwegian crown under an agreement called the Old Covenant, ending the Commonwealth. In 1380 Norway and Iceland passed to the Danish crown, and from 1397 the island was part of the Kalmar Union. After the union broke up, Iceland remained under Copenhagen as part of Denmark-Norway.

The plague reached Iceland in 1402 and again in 1494, decades after the Black Death had swept the rest of Europe, and each outbreak killed a large share of the population. In the fifteenth century English and then German Hanseatic merchants came for the island's stockfish, dried cod, which had become its main export.

The Protestant Reformation was imposed by the Danish king. The last Catholic bishop, Jón Arason of Hólar, resisted and was beheaded with two of his sons at Skálholt in 1550, after which Iceland became Lutheran. The Bible was printed in Icelandic in 1584, which helped preserve the language. Royal power grew: the crown seized Church lands, and in 1662 Icelanders were made to accept the absolute rule of the Danish king.

From 1602 Denmark restricted Iceland's trade to licensed Danish merchants, a monopoly that kept prices low for Icelandic goods and lasted until the late 1780s. In 1627 corsairs from North Africa, sailing from the Regency of Algiers and from Salé in Morocco, raided the east coast and the Westman Islands and carried several hundred people into slavery, an event remembered as the Turkish Abductions. Only a few dozen ever returned.

The eighteenth century brought a run of catastrophes. A smallpox epidemic in 1707 killed perhaps a quarter of the population. In 1783 the Laki fissure in the south began an eight-month eruption that released vast amounts of lava and poisonous gas. Fluoride poisoning killed most of the livestock, and the famine that followed, the Mist Hardships, killed between a fifth and a quarter of the people. The Danish government briefly considered moving the survivors to Denmark. The Althing, long reduced to a court, was abolished in 1800.

During the Napoleonic Wars, in 1809, a Danish adventurer named Jørgen Jørgensen proclaimed Iceland independent with himself as ruler, until a British naval officer removed him after about two months. When the Treaty of Kiel in 1814 transferred Norway to Sweden, Iceland stayed with Denmark.

Inspired by Romantic nationalism, Icelandic students and scholars in Copenhagen began to campaign for self-government, led from the 1840s by the historian and politician Jón Sigurðsson. The Althing was revived as a consultative assembly in Reykjavík and first met in 1845. Free trade was granted in 1854. In 1874, the thousandth anniversary of the settlement, King Christian IX gave Iceland a constitution with control over its own finances, and in 1904 home rule brought a minister for Iceland resident in Reykjavík, responsible to the Althing, the first being Hannes Hafstein. Women gained the vote in 1915. Hardship drove many to emigrate in the late nineteenth century, chiefly to Canada.

On 1 December 1918 the Act of Union made Iceland a sovereign Kingdom of Iceland, linked to Denmark only through the king, with Denmark continuing to handle its foreign affairs. The act could be reviewed after twenty-five years.

In the Second World War, after Nazi Germany occupied Denmark on 9 April 1940, the Althing took over the king's powers. On 10 May British forces landed in Reykjavík without resistance to forestall a German takeover, and in July 1941 the United States took over the defence of the island under an agreement with the Icelandic government. Tens of thousands of Allied troops were stationed in Iceland, and the island was a vital base for the Atlantic convoys. The occupation brought jobs and money and ended the poverty of the Depression years.

In May 1944 Icelanders voted almost unanimously to end the union with Denmark, and on 17 June 1944, Jón Sigurðsson's birthday, the republic was proclaimed at Þingvellir, with Sveinn Björnsson as its first president.

During the Cold War Iceland joined NATO as a founding member in 1949, despite having no army, and in 1951 the United States returned to the base at Keflavík, which it kept until 2006. The American presence was controversial and was a recurring issue in politics.

Fishing was the foundation of the economy, and Iceland extended its exclusive fishing limits step by step, from 4 nautical miles in 1952 to 12 in 1958, 50 in 1972 and 200 in 1975. Each extension led to a confrontation with the United Kingdom, whose trawlers fished Icelandic waters. In these Cod Wars Icelandic coastguard vessels cut the nets of British trawlers and were rammed by Royal Navy frigates. In the third war Iceland broke off diplomatic relations with Britain and threatened to leave NATO, and in 1976 Britain accepted the 200-mile limit.

In 1973 an eruption on Heimaey in the Westman Islands forced the evacuation of the whole town overnight. In 1980 Vigdís Finnbogadóttir was elected president, the first woman in the world to be elected head of state in a national election, and in 1986 Reykjavík hosted the summit between Ronald Reagan and Mikhail Gorbachev.

From the 1990s governments led by Davíð Oddsson liberalised the economy. Iceland joined the European Economic Area in 1994, and the privatised banks expanded aggressively abroad, building up assets many times the size of the national economy. In October 2008 the three largest banks, Glitnir, Landsbanki and Kaupthing, collapsed within days. The currency plunged, Iceland turned to the IMF for a loan, and months of protests outside the parliament, known as the Pots and Pans Revolution, brought down the government. In February 2009 Jóhanna Sigurðardóttir became prime minister, the first openly gay head of government in the modern world. A long dispute with Britain and the Netherlands over compensation for savers in Landsbanki's Icesave accounts was put to two referendums, in which voters rejected the repayment deals. Several bankers were later jailed.

The eruption of Eyjafjallajökull in 2010 shut down much of European air travel for days. Tourism then grew rapidly and helped drive the recovery. In 2016 Prime Minister Sigmundur Davíð Gunnlaugsson resigned after the Panama Papers revealed his family's offshore company, and from 2017 Katrín Jakobsdóttir of the Left-Green Movement led a coalition government.

Volcanic activity on the Reykjanes peninsula, quiet for about eight centuries, resumed in the 2020s. In November 2023 the fishing town of Grindavík was evacuated after magma pushed up beneath it, and a series of nine eruptions near Sundhnúkur from December 2023 to August 2025 sent lava into the edge of the town and over the car park of the Blue Lagoon. In 2024 Halla Tómasdóttir was elected the country's second woman president, and after a snap election in November 2024 the Social Democratic Alliance became the largest party and its leader, Kristrún Frostadóttir, became prime minister in December 2024.