Reykjavik is by far the largest community in Iceland, with a population of about 200,000. Including the neighbouring towns, the capital area has a total population of about 170,000, which is about 60% of Iceland s population of 300,000 people.
Iceland was settled by Norwegian and Celtic immigrants during the late 9th and 10th centuries A.D. According to the medieval Book of Settlements, Ingolfur Arnarson – the first settler of Iceland – built his farm on the peninsula where Reykjavik stands today. The place was named Reykjavik – Smoky Bay - after the columns of steam that rose from the hot springs in the area and made such a profound impression on the original settlers.
Many centuries later, around the middle of the 18th century, a small town started to grow around the farm of Reykjavik, thanks to Royal Treasurer Skuli Magnusson, known as the Father of Reykjavik, who established wool workshops at Reykjavik as part of his efforts to modernise the Icelandic economy. This led to the beginnings of urban development at Reykjavik. Reykjavik received its town charter in 1786.
The Icelandic parliament, Althingi, was founded in 930 AD at Thingvellir in the southwest. In 1798 the Althingi was abolished, but in 1845 it was re-established in Reykjavik, where the country s government and administration were now located. In due course, when Iceland won Home Rule and then independence from Danish rule, Reykjavik became the capital of Iceland. With the rapid economic progress of the 20th century, Reykjavik grew steadily, but developed especially fast in the second half of the century.
For a living view of Reykjavik s past, visit the open-air Reykjavik City Museum- Arbaejarsafn, located in the eastern part of the capital. The newly opened and innovative Reykjavik 871 +/-2 Settlement Exhibition, located on Adalstraeti in the city centre, allows visitors to view the recently discovered, oldest settlement ruins in Reykjavik and Iceland (possibly those of Ingolfur Arnarson or his descendents), featuring an original Viking age longhouse.