Iceland (Icelandic Ísland) is a Nordic island state on the island of the same name and surrounding islets on the border between the Arctic Ocean and the Atlantic Ocean. A population of 372,520 people on an area of 103,125 km² makes it the most sparsely populated European state.[3] The largest city is Reykjavík, which is also the capital. Reykjavík and the surrounding areas in the southwest of the country are home to over two-thirds of the population. While it is a medium-sized European country in terms of area, Iceland can be described as a micro-state in terms of population (it has fewer inhabitants than, for example, Luxembourg).

The island is located directly on the mid-Atlantic ridge, as a result of which it is geologically and volcanically active. Inland is a plateau characterized by sand and lava fields, mountains and glaciers; many glacial rivers flow into the sea through the narrow coastal plains. Iceland's climate is greatly warmed by the Gulf Stream, and despite its high latitude at the touch of the Arctic Circle, the island has only a mildly cold climate with small temperature fluctuations throughout the year.

According to the ancient Landnámabók manuscript, the settlement of Iceland began in 874, when the Norwegian chieftain Ingolfur Arnarson became the island's first permanent settler. In the following centuries, Norwegians and less frequently other Scandinavians migrated to Iceland, along with their slaves of Gaelic origin.

The island was governed as an independent commonwealth under the Althing, one of the oldest functioning legislatures in the world. After a period of civil strife, Iceland came under Norwegian rule in the 13th century. In 1397, the Kalmar Union united the kingdoms of Norway, Denmark and Sweden. Iceland therefore became part of this union and in 1523, after Sweden left it, came under Danish rule. Beginning in 1550, the Kingdom of Denmark began to forcefully promote Lutheranism, but Iceland remained a remote semi-colonial territory in which Danish institutions did not show much.

Following the French Revolution and the Napoleonic Wars, Iceland's struggle for independence took shape, culminating in the declaration of independence in 1918 and the establishment of a republic in 1944. Although the Althing was suspended from 1799 to 1845, the island republic is credited with maintaining the oldest and longest-running parliament on the world.

Until the 20th century, Iceland relied heavily on fishing and agriculture. The industrialization of fisheries and Marshall Plan aid after World War II brought prosperity and Iceland became one of the richest and most developed nations in the world, aided greatly by an abundance of cheap hydro and geothermal energy. In 1994, it became part of the European Economic Area; this further diversified the economy into sectors such as finance, biotechnology and manufacturing.

Iceland has a market economy with relatively low taxes compared to other OECD countries as well as the highest union membership in the world. It maintains a Nordic social security system that provides universal health care and tertiary education to its citizens. Iceland ranks high in economic, democratic and social stability as well as equality and ranks third in the world in average wealth per adult. In 2020, it was ranked as the sixth most developed country in the world by the United Nations Human Development Index and ranked first in the World Peace Index. Iceland runs almost entirely on renewable energy.

Icelandic culture is based on the national Scandinavian heritage. Most Icelanders are descendants of Norse and Gaelic settlers. Icelandic, a North Germanic language, comes from Old West Norse and is closely related to Faroese. The country's cultural heritage includes traditional Icelandic cuisine, Icelandic literature and medieval sagas. Iceland has the smallest population of any NATO member and is the only one without a standing army with a lightly armed coast guard.