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History of Iceland: Everything You Need to Know

History of Iceland: Everything You Need to Know

Subject: Read to find out the complete history of Iceland. Discover who were the first settlers, Icelandic religion and how Iceland became the republic it is today. Find out more.


Iceland, the land of volcanoes, is growing into one of the most popular tourist destinations in the world today. It is the place to be if you love exploring nature, enjoying exciting adventure opportunities, and gaining insight into a vibrant and unique culture.

But, not many tourists seem to know that Iceland also has a rich and varied history that goes way beyond the arrival of the Norse Vikings and settlement. Iceland is a country that has opened up to tourists only in the last decade or so. Much of its tourism industry, some of its infrastructure, and even the local culture have seen changes with the growth of tourism, year by year.

Some of the most common questions outsiders tend to have about Iceland are about the Island's geography, culture, and habits of the Island's people, and the formation of the modern Republic of Iceland. Even more intriguing to some are the dramatic and uninhabitable landscapes, and how human life thrives on despite the elements of nature. To understand all this, learning the history of Iceland is quite necessary.

The volcanic island has gone through a succession of major events that have made it what it is today. DIving into the rich and colorful history of Iceland can add a lot more value to your sightseeing. Knowing the historical events and locations will enhance the experience of your future visits.

So, what are the major stages and events marking the history of Iceland? Read on to get a better idea.


The Complete History of Iceland - From the Island’s Formation to Transition into the Modern Age

* The formation of the island - The formation of Iceland is part of its history least known by outsiders. Intense volcanic activity was responsible for the emergence of the early Icelandic landmass. 70 million years back, a huge magma formation, now known as the ‘Iceland Plume’ began erupting several times. This led to the emergence of Iceland from the earth’s crust and its surfacing above the water level about 16-18 million years back. The Iceland Plume still sits under the island today and is playing a role in shaping the island, even now.


Iceland is placed on the Mid-Atlantic Ridge, a division of the North American and Eurasian tectonic plates. This can be attributed to the heavy volcanic activity that eventually led to the island’s formation. Although the landmass has evolved considerably over millions of years, Iceland is still a country of immense geological activity. With 130 volcanoes and many active ones expected to erupt, the Icelandic island is still witnessing significant growth. The Eurasian and North American tectonic plates are still moving apart from each other, at a rate of 1 millimeter per year. Major volcanic eruptions in Iceland can lead to significant changes in the geology and geographical structure of Iceland.


* The discovery of Iceland and first settlement - According to Landnámabók or the Book of Settlements, Iceland was discovered by Norse populations back in the 9th and 10th centuries. This Medieval manuscript is the most credible source of knowledge about the start of settlement on the island. It contains in-depth knowledge about the earliest settlers and their family trees. Large chunks of the early settlement periods have been labeled as ‘sagas’ or historical tales, which are known by most Icelanders even today.


Although the Norsemen are credited with settlement on the island of Iceland, there is an interesting twist in the story. According to the accounts of Landnámabók, the very first people to set foot on the island were some Irish monks known as the ‘Papar'. The manuscript attests that when the Norsemen arrived on Icelandic shores, they found items such as crosses and books. Furthermore, the Íslendingabók or the Book of the Icelanders have an account by the chronicler Ari Þorgilsson, who also spoke about the Irishmen. Þorgilsson referred to them as the ‘wandering Christians’.


Landnámabók also has information regarding how Iceland got its name. The book credits Flóki Vilgerðarson with naming the island. He had come up with the name upon noticing some icebergs in one of the island’s fjords. This event took place in the winter following the arrival of Vilgerðarson on the island. He is regarded as the first Norseman to intentionally set sail for Iceland.


The first permanent settler in Iceland was Ingólfur Arnarson, who arrived on the Icelandic shores with his brother in law Hjörleifr Hróðmarsson. According to the historical accounts, Arnarson chose Reykjavik as his chosen place of settlement in the year 874. His settlement was an event that prompted many Norwegian leaders to flock to Iceland, as they did not enjoy living under the rule of King Harald in Norway. The next few decades saw even larger populations arriving to settle on the island. It is believed that the island was fully settled by the year 930.


930 CE is regarded as an important year for another reason; the formation of the first national parliament in the world, the Alþingi. It was established to maintain the rule of law in a country that now had a sizeable population. Much of the events of the Settlement period are covered in great detail in the Landnámabók. Today, there are ample historical tour options that take travelers on journeys to the important locations of Icelandic settlement. One can also check out the Settlement Exhibition of Reykjavik to get a better idea regarding life during this era.


An alternate source suggests that the Irish monks (Papar) might not have been the very first ones to set foot on Iceland. 3rd and 4th century CE Roman origin currency was found in Iceland, suggesting that a group of Roman soldiers might have come to the island during that period. Even if this is true, they were probably on the island for a very short while and unlikely to have been settlers.


* Early life in Iceland - When the first settlers arrived in Iceland, large swathes of the country’s land was covered with dense birchwood forests. The early settlers chopped off most of these forests to obtain wood for building their ships, boats, farms, and homes. Early Icelanders also depended on wood as a source of fuel, burnt to heat tie ovens and keep them warm in the harsh winter conditions. This led to a large-scale deforestation event that made much of the vegetated areas barren. Most of the early settlers were of Viking ancestry and that reflected in the architecture of settlements in the country. Many of the accommodations were conventional Viking houses made from timber, and this practice continued until the 14th century. Following this period, Icelandic populations started building sod houses, which were not as good for protecting them against the elements.


The inhabitants of Iceland during the early settlement period depended on trade to obtain certain necessities and luxuries. Although most of the Icelandic land was not arable, the country did have abundant amounts of fish, poultry, sheep, pigs, and horses. Iceland mostly conducted its trade with its neighboring Scandinavian nations and several across northern Europe. Iceland imported essentials like wheat, barley, honey, and tin from England, while the Baltic countries and Russia were able to provide an abundance of slaves and amber. Byzantium was an important trade partner for luxuries including wine, silver, gems, and jewels, and Greenland supplied materials like walrus fur, ivory and skins. Iceland’s secluded location played a major role in it depending on trade.


* The arrival and spread of Christianity - Before the arrival of Christianity as a religion, the only Christians to set foot on the island were the Irish monks who preceded the earliest settlers. The bulk of Icelandic settlers left behind their Norse Gods and converted to Christianity during the early middle ages. Most of the population was Christian by the end of the 10th century. Before that, Icelanders were quite content with their pagan beliefs and customs. The length and breadth of the country consisted of people who were followers of Odin and other Norse Gods. But this was to change soon.


The story of Christianity's growth in Iceland has to do with colonial pressures. Olaf Tryggvason, who became the Norwegian ruler in 995 AD, harbored the agenda of converting the populations of nearby colonies into Christianity. He sent several Christian missions to the island nation but did not achieve much success. In 999 AD, Olaf tried a different strategy for raising the acceptance of Christianity among the Icelanders. He closed off the Norwegian ports to all trading vessels from the island, harming its economy. This caused an uproar in Iceland and the country was on the brink of a civil war.


Þorgeir Þorkelsson, a pagan leader, was tasked with arriving at the most important decision regarding whether Iceland should adopt Christianity. As the debate raged on, Þorkelsson accepted his role as the all-important mediator. He soon decided that Iceland should indeed turn towards the acceptance of the new faith, Christianity. As a symbolic attestation of him being convinced, he climbed atop a waterfall and threw away his pagan idols into the waters below. This waterfall was named the Goðafoss or the Waterfall of the Gods following this event, and can now be explored as part of Iceland tours. During the early days of Christianity being accepted across Iceland, people were still allowed to worship their pagan Gods out of public sight. Other pagan practices like the consumption of horseflesh and child infanticide were also allowed by Þorkelsson. But, all of these were abolished once the church took full control of Iceland. Churches were built across the country, priests appointed to them, and the country's landowners played a sizeable role in establishing a Christian identity.


* The age of Sturlungs - The period following Iceland’s becoming a Christian nation was one of considerable violence, known as the Age of the Sturlungs or the Sturlunga saga. For more than 40 years during the 13th century, Iceland was run amok by significant episodes of internal strife between the chieftains and their followers. This age got its name from the Sturlungs, one of the mightiest family clans in the country back then. According to historical accounts, the year 1220 is the very first year of the Age of the Sturlungs. As many as 6 prominent family clans participated in bloody battles to gain control of the land.


The motivation behind the Age of the Sturlungs was largely greed for wealth and recognition. The chieftains fought among each other to emerge victoriously and gain the favor of the King of Norway. As a goðar or local chieftain in Iceland, one had to constantly prove their dominance and influence, as goðar was not a hereditary honor. There was a great level of competition between chieftains as many of them became wealthy quite fast. As tensions rose across the length and breadth of the island, conflict was imminent.


Sturla Sighvatsson, the nephew of Sturlung clan chieftain Snorri Sturluson, became a vassal to the King of Norway in 1235. He was tasked with bringing the Commonwealth of Iceland under Norwegian reign. Sighvatsson and his father joined forces to enforce the will of the King but faced defeat in the hands of Kolbeinn and Gissur. The two sides faced off in the Battle of Örlygsstaðir, the biggest battle in the history of Iceland. Forces of more than a thousand each side fought a violent war that led to more than 50 deaths.


Þórður kakali Sighvatsson, the son of Snorri Sturluson’s brother Sighvatur, soon returned to Iceland to avenge the death of his kin. His influence became dominant across the land, bringing an end to the Ásbirnings’ rule. Several battles followed, including an Icelandic naval battle known as Flóabardagi (1244), and the infamous Battle of Haugsnes, which caused 110 deaths. The King of Norway was requested to act as a mediator between his warring Icelandic vassals, Þórður kakali and Gissur Þorvaldsson. He decided to favor Þórður, who went on to rule Iceland between 1247-1250.


Gissur returned to Iceland during 1252 and was immediately a target for the followers of Þórður kakali. They burned down his residence at Skagafjörður in an attempt to kill him but failed in the attempt. This was a major incident during the Age of the Sturlungs, known as Flugumýrarbrenna. Gissur had to return to Norway in 1254 after failing to bring Iceland under the Norwegian throne. The fights between clans continued in Iceland, and Gissur was once again sent back home with the title of Jarl to make negotiation efforts. When that failed, Hallvarður gullskór ("Goldenshoes"), the Norwegian King’s special ambassador arrived in Iceland. He became successful in making the Icelanders agree to Norwegian reign. The Gamli sáttmáli ("Old Covenant") agreement was signed in 1264, signifying the end of the war and that of the Icelandic Commonwealth.


Following the Age of the Sturlungs and the end of the Commonwealth, Iceland became a vassal territory of Norway. A century later, the country was handed over to Danish control. Christian III, a Danish ruler, was against the religious practices observed across Iceland during this period. He planned to impose Lutheranism on the people and was successful in his efforts.


* The catastrophic Laki eruptions - Centuries passed after the Age of the Sturlungs and the arrival of Danish establishment in Iceland. Events like the Turkish Abductions, the Kirkjuból witch trial, and the Bubonic plague marked the history of Iceland during this period. But nothing could prepare the island for the calamitous explosion of the Laki volcanic fissure in Iceland. This event in 1783 is one of the most groundbreaking episodes in the history of Iceland. There were continuous eruptions of June 1783 to February 1784, resulting in the death of 9000 Icelandic inhabitants. Along with human life and property, the Laki eruption also eliminated most of the country’s livestock. A disastrous episode of famine ensued, killing a huge part of Iceland’s population.


The period of abject famine following the Laki eruptions are known as the Móðuharðindin or Mist Hardships. Conditions for sustainable life were quite bleak, leading to even more sickness and death on the island nation. It was a time when the calamitous side of nature reigned above all, making people starve and causing loss of life due to the poisonous gases in the air. These conditions led to the prevalence of looting and other crimes across Iceland.


The Laki eruption was an event that impacted regions well beyond Iceland and the people that lived in those. The event affected large parts of Europe, Africa and even North America across the Atlantic. It even affected the monsoon season’s usual trends in places like Africa and India, and caused a massive famine in Egypt, resulting in part of its population dying off. France also experienced famine and poverty, leading to the French Revolution, one of history’s most famous events.


Single-handedly, the eruption of Laki was and still is the most destructive natural disaster in the history of the nation. It was also one of the events that led to many people fleeing Iceland for greener pastures. The Laki event is still one of the largest volcanic disasters in all of Europe. If you are traveling to Iceland anytime soon, be sure to book an expedition to the Laki volcanic craters, a region between the Myrdalsjokull and Vatnajokull glaciers.


* The Second World War period - Iceland continued to be under Danish rule till the early phase of the 19th century. In 1874, the country managed to achieve a state of home rule, and it eventually became a sovereign nation in the year 1918. When the Germans invaded Denmark during April 1940, there was a disruption in the flow of communications between Iceland and its ruling state. On the 10th of April 1940, the Parliament of Iceland gained control of the nation’s Coast Guard and foreign affairs. Sveinn Björnsson, who would go on to become independent Iceland’s first President, was elected as governor by the Parliament.


Before the Second World War, Iceland experienced a set of important events including its invasion by the British in 1940. This event, known as Operation Fork, saw British troops arrive at Reykjavik harbor on the 10th of May. It marked the start of the British invasion, which went largely unopposed despite some protests. The invasion would not have taken place if Iceland had agreed to accept Britain’s offer for joining the Allies. The Brits were wary of fast-growing German interest in Iceland and wanted to exercise control over the region by maintaining their presence in Iceland. They imposed a naval blockade around Iceland and closely controlled goods exports to the Axis powers. A year later, the control of the country was transferred to the United States.


The country’s location on the world map was one of the major determining factors during the Second World War and one that helped it leverage its independence. Iceland was a land of significant geopolitical importance, lying between North America and Europe. Any country that could establish control over Iceland would also control air and sea traffic in the North Atlantic. The Allied powers made Iceland a focal point of their control in the northern fringes of Europe. This is primarily why it could not be targeted as easily by the Germans and their allies.


Through the span of these years, Britain and Canada, followed by the United States kept their garrisons on the island. Iceland held on to its neutral stance from the start of the war until the end of it, despite cooperating with the Brits and Americans. Icelandic social harmony did witness some detrimental and some positive impacts during the years of Allied occupation. As many as 230 Icelanders had lost their lives during the Second World War, and most of them died due to German attacks on fishing and cargo vessels.


Looking back, Iceland can be regarded as a key piece in the geopolitical chess game between the Allied and Axis powers during the Second World War. Winston Churchill had decided to invade the country with British forces as a preventive measure. It turned out to be a sound decision although Iceland did not join the Allies as a key member. The Germans were kept at bay, Iceland experienced considerable infrastructure developments, and trade with Britain increased. As Denmark fell prey to the Axis, Iceland’s transition to an independent country was fast-tracked. It would go on to achieve independence and establish its Republic in mid-1944.


Iceland had received support from the British and the Americans during the War, and even after it. The US granted financial aid to Western European nations including Iceland as part of its Marshall Plan program. Between 1948-1951, Iceland received $43 million for its contributions to the War.


* The independence of Iceland - It took Iceland some time to declare itself as an independent country. It broke free from 500 years of Danish rule towards the end of the Second World War. This happened in 1944 during the War, when Denmark was still under control of the Axis powers. The Republic of Iceland was established on June 17, 1944, at a time when almost all of the population was in favor of complete independence. This was confirmed through a referendum held during May of the same year.


Iceland declared its separation from the union with Denmark in 1944 without facing any resistance. There is some history related to the date chosen for the declaration, as 17th June is the birthday of Jón Sigurðsson, former Icelandic politician and the leader of the country’s 19th century independence movement. The Icelandic national flag's official use also started from this day. Sveinn Björnsson was elected as the first President of Iceland and the country’s constitution was instituted. Reykjavik, Akureyri and all other places in Iceland witnessed a huge wave of jubilant celebration on the streets. Massive crowds also flocked to the Þingvellir, the location of the Alþingi, and a location of great cultural importance.


As Iceland began looking forward as an independent country, it had to shed the remnants of its colonial past. One of the most important steps in this direction was the abolition of the Danish–Icelandic Act of Union from 1918. Iceland left behind all its monarchical implications and became fully autonomous. This was a crucial period for nationalism and showcasing the national identity of the country to the world. Iceland distanced itself from its erstwhile ruler Denmark and made efforts to reach out to its European neighbors. Icelanders strived to uphold their values of religious expression and the protection of their language. People started looking back at the stories of the Sagas with pride and a sense of belonging prevailed. After centuries of suppression and foreign control, Icelanders had a country and a culture to call their own.


Jón Sigurðsson is considered to be the founder of modern Iceland and the most influential figure in the country’s independence movement. Icelanders refer to him as President Jón out of respect and gratitude for his efforts. June 17th is celebrated as the Icelandic National Day, marked by parades and flag ceremonies.   


* Development of modern Iceland - The end of the Second World War and the independence of Iceland were events that took place not too far apart in time. Iceland had an understanding with the United States stipulating that the latter would withdraw all their forces from the country at the end of the Second World War. The United States honored its agreement and moved out its Military from Iceland but after a considerable delay. Additionally, there was a precondition to this move out of Iceland. The US still had a right to establish a base at Keflavík, in case future war scenarios arose.


The people of Iceland enjoyed their independence and were opposed to the idea of being under another nation’s control again. Marshall Aid started pouring in during 1948 and the country’s government focused on enhancing infrastructure and maintaining economic stability. Relationships with European nations were built and trade picked up the pace. In 1949, the North Atlantic Treaty Organization (NATO) was established as a major power block of Atlantic region nations. Iceland, trying to maintain harmony and pressurized by its peers, gave in to the requests of joining NATO. It became one of the founding members of the organization following the declaration of the decision at Alþingi. However, the people of Iceland, belonging to a country that just became independent, were strongly opposed to the idea.


A series of riots broke out demonstrating the public outcry for the NATO decision, especially in the national capital Reykjavik. Due to these events, the government was forced to exercise a good amount of caution while entering the agreement. The primary conditions laid out by it stated that Iceland would not have to take part in any armed conflicts and that no foreign troops would stay in Iceland in times of peace. But the agreement was broken in part during the 1950 Korean War. The NATO alliance requested the US to be in charge of protecting Iceland in 1951, taking the very real threat from the Soviets into consideration.


In 1951, US military presence in Iceland was established again, with the influx of personnel and the shipping of armaments. Most of the activity was centered around Keflavík airbase, the most vital air force location in the country. The military presence of the US prevailed for at least 4 more decades and Iceland was used as a base for monitoring activities during the Cold War era. The terms of the NATO treaty that led to US military re-establishment stipulated that the United States would be tasked with protecting Iceland for an undefined time.


During the latter half of the 20th century, Iceland’s focus remained on becoming an economic powerhouse in Europe. Its economy depended largely on the export of fish to other nations during this period. But, the country could not stay free from conflict for long as a new situation developed in the 1950s. discovered that Britain was fishing in its waters, and strongly condemned their actions. The supremacy for determination of fishing rights in the North Atlantic led to successive combat episodes, known as the Cod Wars. It was a series of 4 conflicts starting in 1958 and ending in 1976. There were a great number of events that took place in these wars, which were all ended by Iceland emerging victorious.

An interesting natural event happened in Iceland during the 1960s. A volcanic eruption that took place in November 1963 gave rise to the island of Surtsey, right off the southeast coast of Iceland. It is the newest island formation in the world even today and was a result of a series of eruptions till 1967. Surtsey, named after the Norse God Surtur, is rightfully one of the geological wonders of Iceland. The island was made a UNESCO World Heritage Site in 2008.


The 1980s were also signified by some key events involving Iceland. Vigdís Finnbogadóttir was elected as the fourth Icelandic President in 1980, and the first democratically elected female president in the world. She went on to serve the country for 16 years. During the 80s, Iceland’s economy also suffered from a high inflation rate and became a nuclear-free zone.


The Cold War was near to reaching its end but there was a need for peaceful negotiation among the USA and USSR. This was achieved at the Reykjavík Summit, held in the nation’s capital from the 11-12 October in 1986. US President Ronald Reagan and Soviet Union General Secretary of the Communist Party, Mikhail Gorbachev were the two key participants at the Summit. The two sides failed to reach an agreement, but the meet was a crucial precursor for developments to come. It is widely regarded as one of the most important Cold War-era events, and one that helped the warring nations gain an understanding of each other. Today, one can pay a visit to Höfði, the legendary location where the Reykjavik Summit took place.


The 1990s in Iceland were a time of considerable change and growth. The Independence Party started reforms to drive the country out of its economic conditions. Fishing had always been the most major source of income for the Icelandic economy until the 1990s. Overfishing had reduced the stock in the waters and time was needed for levels to get back to normal. This led to unemployment and harmed the exports of the country. During this decade, the focus was shifted towards achieving income and growth through industrial innovation. Iceland became a member of the European Economic Area in 1994, a move that strengthened its position across the globe.


Some other events of the 1990s included David Oddsson being elected as Prime Minister during 1991, and the country’s exit from the International Whaling Commission (IWC) in 1992 over disagreements. In 1994, Iceland became a member of the European Economic Area (EEA), an agreement that helped it reduce inflation and achieve measurable yearly growth. The Independence Party and Progressive Party of Iceland joined forces in 1995, bringing about several notable economic changes. The coalition sharply reduced the rates of inheritance tax and corporate income tax and removed the net wealth tax. Olafur Ragnar Grimsson was elected as the President of the nation in 1996. 


In May 2006, the United States announced that it planned on withdrawing the Iceland Defense Force (IDF) from the country. By August of the same year, all US air force and military presence were withdrawn from Iceland. The Keflavík Air Base was closed down by the USA during September, marking the end of military presence that had started in 1951 following the NATO agreement. 

The financial crisis of 2008 was one of the most major negative episodes in the history of Iceland. It was caused by the defaulting of the three most major private-owned commercial banks in the country. Kaupthing, Landsbanki and Glitnir, the three banks in question, had built up assets that were as high as ten times the GDP of the country. When the global financial crisis hit in 2008, these banks were unable to refinance the loans taken. Iceland’s government was also incapable of bailing out the banks and the financial situation grew worse very soon. Loans had to be taken from the International Monetary Fund and several of Iceland’s neighboring countries.

One of the main contributing factors for the crisis was inflated interest rates being offered by the banks to domestic and overseas customers. This led to the money assets rising dynamically while GDP growth had remained the same. Iceland took a long time to recover from the crisis and learned a great number of lessons from it. But the crisis period did have a positive impact and so did the 2010 eruption of the Eyjafjallajökull volcano. As the eruption started attracting innumerable tourists to the country, it was also preparing to lay a strong focus on tourism. Efforts started being made to market the country’s natural attractions as tourism hotspots. 


The long and colorful history of Iceland is quite interesting with all its ups and downs. The country has endured long periods of struggle and subjugation over the centuries but has always retained its identity and character. Icelandic tourism becoming popular has made many foreigners aware of the country's amazing history, culture and various natural wonders. This North Atlantic nation was inhabited as recently as the 9th century CE and has now become one of the world’s leading economies. The story of Iceland over the ages is truly inspiring in several ways. How the country emerged from its pagan past to become a commonwealth, to its long history with Norway and Denmark, to its recovery from the Laki disaster, are all commendable. Nature has also played a massive role in shaping the nation’s past.

Visiting Iceland is the best option for anyone interested in exploring its history. You can read about it and use your imagination, but traveling to the historically important sites will give you a far greater experience. Journey through the island’s regions on historical tours and explore to your heart’s content. See the amazing sights and hear the legendary stories. 



Author: (Abhi Chauhan)
Date: 23/11/2019


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