The Vikings

The Viking settlers that originally inhabited Iceland in 874 are believed to have been Norwegian outlaws. Fleeing from their punishments in Norway, or just the general rule of the Norwegian king, they settled in Icelandic places they believed the god Thor had chosen for them. The best known of these settlers, and the one attributed to be the first to settle in the country, was Ingolfur Arnarson.
Some of the outlaws stuck to their ways and ended up being outlawed from Iceland as well. One of them was Erik the red.

Erik the red (a name believed to have come from his great red hair) was the man who then went on to Greenland and is generally considered the first foreign settler there. His Icelandic son Leifur Eriksson, however, went even further and was the first European resident to reach North America.

But for the rest of the Vikings that arrived in Iceland it was a fresh start and they were all keen to make themselves a better life in Iceland than they ever had in Norway. In light of this a lot of things developed very quickly, including the parliamentary system, which also handled all criminal convictions. Iceland's parliament, the Althing, is the world's oldest running parliament. It is also the place where the Icelandic people decided (admittedly with some help and threats from the Norwegian King) to adopt Christianity in the year 1000.
(The original meeting place of the Althing, Thingvellir, is a very popular tourist attraction not far from Reykjavik.)

A last point worth mentioning is that Iceland is believed to have been to a very small extent inhabited by Irish monks before the Vikings came, but they all fled as soon as the Vikings arrived.

For more on the Vikings and their ways, see these videos
These magazines
And these books

Also check out the Icelandic Sagas on Amazon.com

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