The first known permanent Norse settler was Ingólfur Arnarson, who built his homestead in present-day Reykjavík
in the year 874. Ingólfr was followed by many other emigrant settlers, largely Norsemen and their thralls, many of whom
were Irish or Scottish. By 930, most arable land had been claimed and the Althing, a legislative and judiciary parliament,
was initiated to regulate the Icelandic Commonwealth. The Commonwealth lasted until the 13th century, when the
political system devised by the original settlers proved unable to cope with the increasing power of Icelandic
chieftains.
The internal struggles and civil strife of the Sturlung Era led to the signing of the Old Covenant in 1262,
which ended the Commonwealth and brought Iceland under the Norwegian crown. Possession of Iceland passed to
Kalmar Union in 1415, when the kingdoms of Norway, Denmark and Sweden were united. After the break-up of the
union in 1523, it technically remained a Norwegian dependency, as a part of Denmark-Norway.(1536-1814)
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 Danish-Icelandic Act of Union, an agreement with
Denmark signed on 1 December 1918 and valid for 25 years, recognized Iceland as a fully sovereign state in a personal
union with Denmark.
On 31 December 1943, the Danish-Icelandic Act of Union expired after 25 years. Beginning on 20 May 1944, Icelanders voted
in a four-day plebiscite on whether to terminate the personal union with Denmark, abolish the monarchy, and establish a
republic.
The vote was 97% in favour of ending the union and 95% in favour of the new republican constitution. Iceland formally
became a republic on 17 June 1944, with Sveinn Björnsson as its first president.