The Icelandic Commonwealth had a unique political system whereby chieftains (goðar) established a common legal code and settled judicial disputes at the Althing, a national assembly.

[5] On a regional level, the goðar of the thirteen district assemblies convened meetings every spring to settle local disputes.

He spent three years in Norway and returned with the foundation of Úlfljótr's Law, which would form the basis for Iceland's national assembly.

[6] The descendants of Ingólfr Arnarson, the first settler of Iceland, held the ceremonial position of allsherjargoði and had the role of sanctifying the Alþingi each year.

"[11] Chieftains were highly reliant on the support of farmers in their domain in the 11th and 12th centuries, and did thus not have princely powers or subjects in the districts that they represented.

[12] Around 1190, the number of chieftaincies declined and power started to centralize in individual chieftains controlling larger regions of the country.

[14] According to historian Jón Viðar Sigurðsson, "a chieftain based his power on his personal qualities, his wealth, friends, assembly men, kinsmen and in-laws.

"[15] Historian Árni Daniel Júliusson further notes that the food production of the peasantry was the "basis of political and military power".

No organized cavalry formations or formations of troops equipped with projectile weapons are recorded: instead the bulk of the forces were formed in units of light, medium and heavy infantry, with bowmen or slingers distributed among the infantry units, operating as light support skirmishers.

This relatively low casualty rate might be attributed to the blood-feud mentality which permeated Icelandic society, which meant that the defeated army could not honourably be slaughtered to a man.

After his son Gissur was installed as bishop, the power and wealth of the church quickly grew due to the introduction of tithing, the first tax introduced in Iceland.

[20] In the early 13th century, the Age of the Sturlungs, the Commonwealth began to suffer from chaos and division resulting from internal disputes.

One historian argues the chaos and violence of this period stem from an imbalance of power and changes in the nature of Icelandic warfare.

Whereas the number of goðar had been at least 39 early in the Icelandic Commonwealth, a few powerful families had consolidated control over most of the goðorð in the late 12th century.

[21] The introduction of pitched battles and harassment of farmers on a regional basis raised the stakes and dangers, which may have incentivized consolidation.

[1] According to the libertarian theorist David D. Friedman, "Medieval Icelandic institutions have several peculiar and interesting characteristics; they might almost have been invented by a mad economist to test the lengths to which market systems could supplant government in its most fundamental functions.

[28] Although noting that there was a single legal system, Friedman argues that enforcement of the law was entirely private and highly capitalist, providing some evidence of how such a society would function.

"[27] Commenting on its political structure, libertarian scholar Roderick Long remarks: The legal system's administration, insofar as it had one, lay in the hands of a parliament of about 40 officers whom historians call, however inadequately, "chieftains".

In addition to their parliamentary role, chieftains were empowered in their own local districts to appoint judges and to keep the peace; this latter job was handled on an essentially fee-for-service basis.

As economic historian Birgir Solvason notes in his masterful study of the period, "just buying the chieftainship was no guarantee of power"; the mere office by itself was "almost worthless" unless the chieftain could "convince some free-farmers to follow him".

[29]Summarizing his research, Friedman concludes in part:[30] It is difficult to draw any conclusion from the Icelandic experience concerning the viability of systems of private enforcement in the twentieth century.

And whether the Icelandic institutions did work well is a matter of controversy; the sagas are perceived by many as portraying an essentially violent and unjust society, tormented by constant feuding.

"[27]A 2021 study by economists Vincent Geloso and Peter T. Leeson concluded that: The data available for comparing living standards in Iceland and other territories in medieval Europe—data on human height, wages, and population growth—are sparse, crude, and therefore challenging to interpret.

[30]Friedman and Bruce L. Benson argued that the Icelandic Commonwealth saw significant economic and social progress in the absence of systems of criminal law, an executive, or bureaucracy.