At first glance, Iceland’s settlements appear straightforward: a cluster of towns and villages spread across its dramatic landscape. However, the way these communities are officially organised hides a complex relationship between daily life and local administration.
A layered approach to communities
In Iceland, the country is divided into municipalities, administrative regions that serve as the basis for most local government responsibilities. However, these municipalities are often comprised of multiple settlements or “localities,” known in Icelandic as “staðir” or “hverfi” in certain contexts. These localities are not autonomous administrative regions; instead, they function mainly as units for information gathering and statistical analysis, especially during the national census.
For instance, a single municipality may include several localities. One example is Árborg, which includes Selfoss, Stokkseyri, Eyrarbakki and Tjarnabyggð as distinct settlements within its boundaries. At the same time, some municipalities consist of only one locality, while a few others contain no settlements classed as localities at all.
Names, numbers and exceptions
Many Icelandic municipalities and their main locality share a name, such as Hafnarfjörður or Akranes. This overlap can cause confusion, but the locality and the municipality may not perfectly align in terms of geographical coverage. Even when a locality is the only one within its namesake municipality, it might not fill the entire area governed by that municipality.
Locality borders always remain within one municipality and do not straddle administrative lines, a detail that ensures population statistics, planning, and analysis remain clear-cut, even as settlements themselves evolve or merge.
According to 2025 population figures, Reykjavík stands out as Iceland’s largest locality, home to 139,804 people. The next most populous are Kópavogur (40,286), Hafnarfjörður (32,398), and Reykjanesbær (22,697). All recorded localities combined pushed Iceland’s total population just past 394,000 for the year.
Other localities range in size from more than twenty thousand inhabitants, like Akureyrarbær in the north, to communities with under a hundred residents, such as Fljótsdalshreppur (115), Kaldrananeshreppur (117), or even Tjörneshreppur (54). Populations are monitored annually, and changes in figures may reflect recent natural events, such as evacuations following volcanic hazards.
While municipalities handle the day-to-day responsibilities of government, such as schools, social services and planning, localities essentially map out where people live for record-keeping and research. This layered system speaks to Iceland’s dispersed population pattern, shaped by geography, history and the rhythms of rural and urban life.
Sources
- Wikipedia
- Wikipedia (Icelandic) in Icelandic
