Irish monks lived on Iceland from the eighth century onwards, however these were replaced by the Norsemen who settled on Iceland during the period 870 - 930 A.D. along with their Irish slaves. The Icelandic Free State, ruled by though the parliament or Althing ran up until 1262, where under increasing pressure from the Icelandic Chieftains the political system collapsed. Much civil strife followed during the Sturlung Era, and so the Old Covenant was signed which brought the county under the Norwegian Kingdom. From this period onwards Iceland became one of the poorest of European countries, as the agricultural country suffered from infertile soil, a harsh climate and volcanic eruptions. This was added to by the Black Death’s arrival on Iceland which killed around half the population, pirate raids and trade restrictions imposed by Denmark, which had joint control of the island since the Norwegian -Danish union in the 14th Century.
Denmark was split from Norway in 1814 after the Napoleonic Wars, and kept control of Iceland as part of the post-war agreement. However these were not happy times on the island, as the economic and welfare situation continued to worsen. This led to large waves of migration towards the northern parts of America, especially Canada. At the same time there was a desire for independence from Danish rule, which was built on the ideas which were sweeping mainland Europe at the time. The independence movement led by Jón Sigurðsson, proved to be successful and in 1874, Denmark granted Iceland home rule. This agreement was expanded upon twice, once in 1904 and then again in 1918 when Denmark recognised Iceland as an independent state under the Danish crown.
In 1814, following the Napoleonic Wars, Denmark-Norway was broken up into two separate kingdoms via the Treaty of Kiel. Iceland, however, remained a Danish dependency. The country's climate worsened during the 19th century, causing mass emigration to North America, largely Canada. Meanwhile, a new independence movement arose under the leadership of, inspired by the romantic and nationalist ideologies of mainland Europe. In, which was expanded in 1904. The Act of Union, an agreement with Denmark signed on December 1, 1918, recognized Iceland as a fully sovereign state under the Danish king.
These links with Denmark were severed however in 1940 when Germany invaded. Iceland remained neutral whilst Denmark was under occupation, but British forces arrived in Reykjavík harbour violating this decision, they were soon replaced by American forces which stayed until the end of the war. In 1944 the people of Iceland voted thought a plebiscite to become independent from Denmark. Soon after the war the island become a member of NATO, which led on to the re-posting of American troops in 1951, despite large domestic opposition which included riots the troops arrived on the island and stayed until 2006 as part of the cold war military posturing. The second half of the twentieth century saw economic change in the country as it underwent some industrialisation and had strong growth led by fishing. Wealth grew, with Iceland becoming one of the most expensive paces to live in the world, which it remains today.