Reykjavík and the six surrounding municipalities form what is often called Greater Reykjavík. Greater Reykjavík is home to almost three out of every five Icelanders. Of Iceland´s total population of 319.756, some 201,585 live in Greater Reykjavík.  Reykjavík is the capital of Iceland and, with 117,720 inhabitants, is home to 38% of the country's total population.
The different municipalities of Greater Reykjavík seem to merge into a single unit with no natural boundaries between them. Together they house virtually all the main administrative and commercial institutions in Iceland, and the greater part of
the nation's services and cultural attractions.
The communities neighbouring Reykjavík are not suburbs, but independent municipalities that have grown up alongside it with their own character and local services, although many of their inhabitants work in the capital. Reykjavík has three relatively large residential suburbs within its own city boundaries, where more than half its population live: Árbær, Breiðholt and Grafarvogur.
Apart from Reykjavík, the communities that form Greater Reykjavík are Mosfellsbær to the northeast; Kópavogur, Garðabær, Álftanes, and Hafnarfjörður to the south; and Seltjarnarnes on the westernmost tip of the peninsula on which Reykjavík is situated.
As capital, it is the focus of business, communications, government administration, and educational, social and health services, as well as offering more cultural attractions and entertainment than anywhere else. Most of its population are employed in trade and services, although there is a wide variety of light industry. Reykjavík is also, perhaps surprisingly, one of the most important fishing ports in the country.
When Ingólfur Arnarson, Iceland´s first settler, approached the south coast in 874, he threw overboard the high-seat pillars he had taken with him from Norway and vowed to make his
home where the Gods washed them ashore. He found them in a place he named Reykjavík, “Smoky Bay,” after steam he saw rising from hot springs. In spite of its name, Reykjavík is a completely smoke-free city, since all houses are heated by geothermal water.
Reykjavík remained only a handful of farmhouses until the middle of the 18th century, when a small community began to grow up around the wool-dyeing, weaving and ropemaking factories set up by High Sheriff Skúli Magnússon (1711-1794). It was granted a municipal charter in 1786, then with a population of 170, but over the following decades various legislative, administrative, ecclesiastical and educational institutions gradually moved to, or were established in, this developing urban centre. The capital had 5,000 inhabitants at the beginning of the twentieth century and has been growing at a much faster rate than the national population, especially in the post-World War II period. Part of the charm of Reykjavík, however, is that although it is large enough to offer high international standards of service, it is still small enough to have a friendly “village” feel about it.
Besides its numerous cultural and entertainment attractions, there are plenty of ideal natural leisure areas for strollers and ramblers in the city itself, such as Öskjuhlíð Hill, the Laugardalur gardens, the area around the Tjörnin Lake, and the valley where the Elliðaá salmon river runs. On the outskirts of town is the Heiðmörk Nature Reserve, where the exceptionally lush trees and vegetation (by Icelandic standards anyway) make it a favourite picnic spot among people from Greater Reykjavík.

For a living view of Reykjavík's past, visit the open-air museum Árbæjarsafn, located in the eastern part of the capital. The newly opened and innovative Reykjavik 871 +/-2 Settlement Exhibition, located on Aðalstræti in the city centre, allows visitors to view the recently discovered, oldest settlement ruins in Reykjavík and Iceland (possibly those of Ingólfur Arnarson or his descendents), featuring an original Viking age longhouse.



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