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Iceland is a Nordic country between the North Atlantic and the Arctic Ocean. It has a population of and an area of , making it the most sparsely populated country in Europe. The capital and largest city is Reykjavík; the surrounding areas in the southwest of the country are home to two-thirds of the population. Iceland is volcanically and geologically active. The interior consists mainly of a plateau characterised by sand and lava fields, mountains and glaciers, while many glacial rivers flow to the sea through the lowlands. Iceland is warmed by the Gulf Stream and has a temperate climate despite a high latitude just outside the Arctic Circle.
According to Landnámabók, the settlement of Iceland began in AD 874 when the Norwegian chieftain Ingólfr Arnarson became the first permanent settler on the island.
Iceland has a free-market economy with relatively low taxes compared to other OECD countries. It maintains a Nordic social welfare system that provides universal health care and tertiary education for its citizens. Iceland ranks high in economic, political and social stability and equality. In 2013, it was ranked as the 13th most-developed country in the world by the United Nations' Human Development Index.
Icelandic culture is founded upon the nation's Scandinavian heritage. Most Icelanders are descendants of Germanic and Gaelic (Celtic) settlers. Icelandic, a North Germanic language, is descended from Old Norse and is closely related to Faroese and West Norwegian dialects. The country's cultural heritage includes traditional Icelandic cuisine, Icelandic literature and mediaeval sagas. Iceland has the smallest population of any NATO member and is the only one with no standing army, its lightly armed coast guard being in charge of defence.