A kjøpstad (historically kjøbstad, kjöbstad, or kaupstad, from Old Norse: kaupstaðr) is an old Scandinavian term for a "market town" in Denmark–Norway for several hundred years.
Local farm goods and timber sales were all required to pass through merchants at either a small seaport (ladested) or a market town (kjøpstad) before export, which encouraged local merchants to ensure trading went through them, which was so effective in limiting unsupervised sales (smuggling) that customs revenues increased from less than 30% of the total tax revenues in 1600 to more than 50% of the total taxes by 1700.
The reasons for this late development are complex but include the sparse population, lack of urbanisation, no real manufacturing industries, and no cash economy.
[5] The first kjøpstads date back to the 11th and 12th centuries when the King of Norway sought to centralise commerce in specific places that offered strategic significance, providing a local economic base for constructing fortifications and a population for the area's defence.
Under the 1838 formannskapsdistrikt law, kjøpstads and ladesteds were granted the ability to set up a town council just like the other cities and rural municipalities in the country.