Iceland remained independent for over 300 years, and was subsequently ruled by Norway and Denmark, formally as a Norwegian crown colony until 1814 when the united kingdoms of Denmark and Norway were separated by the treaty of Kiel, and Iceland was kept by Denmark as a dependency. Limited home rule was granted by the Danish government in 1874, and protectorate like independence and sovereignty over domestic matters followed in 1918, foreign relations and defense remained in the authority of the Danish and the Danish king remained the sovereign of the nation until 1944, when the current republic was founded.
Iceland's old parliament, the Althing, has 63 members, who are elected by the population every four years. The head of government is the prime minister, who together with his cabinet takes care of the executive part of government. The prime minister is appointed by the president, who is elected every four years, and is the head of state.
The 23 counties are mostly a historic division. Today Iceland is split up between 26 Magistrates that are the highest authority over the local police (except in Reykjavík where there is a special office of police commissioner) and carry out administrative functions such as declaring bankruptcy and marrying people outside of the church.
Until 2003, the constituencies for the parliament elections were the same as the district court jurisdictions but by an amendment to the constitution they were changed so that today there are only 6 constituencies. The change was made in order to balance the weight of different districts of the country since a vote cast in the sparsely populated areas around the country would count much more than a vote cast in the Reykjavík city area, the imbalance between districts has been reduced by the new system but it still exists.
The economy depends heavily on the fishing industry, which provides over 60% of export earnings and employs 8% of the work force. In the absence of other natural resources (except for abundant hydro-electric and geothermal power), Iceland's economy is vulnerable to changing world fish prices. The economy remains sensitive to declining fish stocks as well as to drops in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon.
The only natural resource conversion is the manufacture of cement. Most buildings are concrete with expensive imported wood used only sparingly and where necessary.
The center-right government plans to continue its policies of reducing the budget and current account deficits, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, diversifying the economy, and privatizing state-owned industries. The government remains opposed to EU membership, primarily because of Icelanders' concern about losing control over their fishing resources.
Iceland's economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, with the recent trends in ecotourism and whale-watching. Growth has slowed between 2000 and 2002, but is expected to pick up in 2003.
The isolated location of Iceland has resulted in limited immigration and limited genetic inflow in its human population over hundreds of years. The resulting genetic similarity is being exploited today for genetic studies.