Iceland is a place.
Iceland ( [ ˈaɪslənd ] [ ˈistlant ] ) is a Nordic island country in the North Atlantic Ocean . It has a population of and an area of 103000 km2 , making it the most sparsely populated country in Europe . The capital and largest city is Reykjavík . According to the ancient manuscript Landnámabók , the settlement of Iceland began in the year 874 AD when the Norwegian chieftain Ingólfr Arnarson became the first permanent settler on the island . In 1994 , it became a part of the European Economic Area , which further diversified the economy into sectors such as finance , biotechnology , and manufacturing .