Iceland has a population of around 380,000 — about the same as a mid-sized city. Two-thirds of the population lives in the Greater Reykjavik area. Outside the capital, the country is sparsely inhabited, with fishing and farming communities dotted around the coast.
Icelanders are descended primarily from Norse settlers who arrived in the 9th century, and from Irish and Scottish slaves and settlers they brought with them. The genetic record is one of the best-documented in the world — the deCODE genetics company in Reykjavik has sequenced the genomes of a large portion of the population and traced ancestry with unusual precision. The founding population was small and relatively isolated, which gives modern Icelanders a distinctive genetic profile.
The language, Icelandic, has changed remarkably little since the medieval sagas were written. An educated Icelander can read 13th-century texts with limited difficulty. New foreign words are routinely replaced with Icelandic coinages — the word for computer (tölva) was invented in the 1960s from the old words for number and prophetess.
Icelanders are known for being well-educated, culturally productive, and egalitarian. The country publishes more books per capita than almost anywhere else, and the literary tradition runs deep — the medieval sagas are still read and argued about. The music scene (Björk, Sigur Rós, Of Monsters and Men) has been disproportionately influential. Literacy is effectively universal.
Icelanders tend to be direct and informal in manner. First names are used even in professional contexts. The phone book is still organized by first name. A mild skepticism toward authority and hierarchy runs through the culture; the 2008 financial crash, which was severe in Iceland, reinforced a deep distrust of banks and politicians.
Belief in elves and hidden people (huldufólk) is frequently cited in tourist brochures. The reality is more nuanced — most Icelanders don't claim to literally believe in elves, but there is a widespread cultural tendency to not rule them out, and some construction projects have been rerouted around supposedly elf-inhabited rocks.