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 . 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 . Affected by the ongoing worldwide financial crisis , the nation 's entire banking system systemically failed in October 2008 , leading to a severe depression , substantial political unrest , the Icesave dispute , and the institution of capital controls .