The people in Iceland did not live in villages. Everyone had their own farm. The farms could be far apart. The Icelanders made a living from cattle breeding and fishing. Many Icelanders had sheep and the wool was of very good quality. Fishing was important, too. Norwegians, Danes and Englishmen also fished in the Icelandic waters. The Icelanders exported fine woollen cloth and dried fish. Merchants from the Norwegian town of Bergen took care of the trade from Iceland for a long time, selling cloth and fish to the merchants of the Hansa.
As early as in 1262, the Icelanders were ruled by the King of Norway. In 1380, Iceland joined Norway in a union with Denmark. Denmark increased its influence in Iceland. The English were also interested in Iceland during the 15th century. Even though Iceland belonged to Norway and Denmark, it had its own parliament which made decisions concerning Iceland. The parliament was and is still called "alltinget".
The Icelandic sagas are famous. During the long, dark winter evenings, the Icelanders would tell each other the stories of old gods and ancient kings and families. In the 13th century, Snorre Sturlasson wrote down beautiful poems and many exciting stories. The best known poem by Snorre is the "Edda".
Under "Tales and Pictures", you can read the beautiful poem about the creation of the earth.