[5] Reykjavík is believed to be the location of the first permanent settlement in Iceland, which, according to Landnámabók, was established by Ingólfur Arnarson in 874 AD.

The city was officially founded in 1786 as a trading town and grew steadily over the following decades, as it transformed into a regional and later national centre of commerce, population, and governmental activities.

Reykjavík is the centre of Iceland's cultural, economic, and governmental activity, and is a popular tourist destination among foreigners.

The name originally referred to both the bay on the northern shore of the modern city centre, between Örfirisey [is] and Laugarnes, as well as the estate and farm of Ingólfr Arnarson.

This form of the name fell out of use shortly after settlement, and the estate was referred to as Vík á Seltjarnarnesi until the name Reykjavík was revived when urban development began centuries later.

In 1845 the Alþingi, the general assembly formed in 930 AD, was re-established in Reykjavík; it had been suspended a few decades earlier when it was located at Þingvellir.

On the morning of 10 May 1940, following the German occupation of Denmark and Norway on 9 April 1940, four British warships approached Reykjavík and anchored in the harbour.

There was no armed resistance, and taxi and truck drivers even assisted the invasion force, which initially had no motor vehicles.

The economic effects of the occupation were positive for Reykjavík: the unemployment of the Depression years vanished, and construction work began.

The British built Reykjavík Airport, which remains in service today, mostly for short-haul flights (to domestic destinations and Greenland).

An exodus from the rural countryside began, largely because improved technology in agriculture reduced the need for manpower, and because of a population boom resulting from better living conditions in the country.

During the Ice Age (up to 10,000 years ago) a large glacier covered parts of the city area, reaching as far out as Álftanes.

The hills of Öskjuhlíð and Skólavörðuholt appear to be the remains of former shield volcanoes which were active during the warm periods of the Ice Age.

The capital city area continued to be shaped by earthquakes and volcanic eruptions, such as the one 4,500 years ago in the mountain range Bláfjöll, when the lava coming down the Elliðaá valley reached the sea at the bay of Elliðavogur.

Reykjavík is a spread-out city: most of its urban area consists of low-density suburbs, and houses are usually widely spaced.

The city's coastal location does make it prone to wind, however, and gales are common in winter (influence of the Icelandic Low).

This is a result of exposure to the maritime winds in its exposed west coast location that causes it to be much cooler in summer than similar latitudes in mainland Scandinavia.

The 1994 election was won by Reykjavíkurlistinn (the R-list), an alliance of Icelandic socialist parties, led by Ingibjörg Sólrún Gísladóttir.

In October 2007, a new majority was formed on the council, consisting of members of the Progressive Party, the Social Democratic Alliance, the Left-Greens and the F-list (liberals and independents), after controversy regarding REI, a subsidiary of OR, the city's energy company.

This changed once again on 14 August 2008 when the fourth coalition of the term was formed, by the Independence Party and the Social Democratic Alliance, with Hanna Birna Kristjánsdóttir becoming mayor.

[45] The economic boom led to a sharp increase in construction, with large redevelopment projects such as Harpa concert hall and conference centre and others.

There are 14 embassies in Reykjavik, in addition to ambassadorial residences, and representative offices for Greenland, the Faroe Islands, and the European Union.

[46] Per capita car ownership in Iceland is among the highest in the world at roughly 522 vehicles per 1,000 residents,[47] though Reykjavík is not severely affected by congestion.

Several multi-lane highways (mainly dual carriageways) run between the most heavily populated areas and most frequently driven routes.

[50] The total thermal capacity of Reykjavíks hot water production is around 830MW, and the city has an average heating demand of 473 MW.

[53] Reykjavík is the capital, and in fact Iceland's only city, and as such, it plays a vital role in all cultural life in the country.

This literary heritage is the core of the nation's identity and narrative art is the single most important part of its cultural history.

The language has not changed much since the time of settlement in the 9th century and modern Icelanders can still read the original medieval texts with relative ease.

Halldór Laxness was awarded the Nobel Prize for Literature in 1955 for "vivid epic power which has renewed the great narrative art of Iceland".

Crime writer Arnaldur Indriðason has won prizes abroad, including The Golden Dagger Award.