Reykjavík, is the nations capital and by far the largest community in Iceland, with a population of about 200,000. Including the neighbouring towns, the capital area has a total population of about 170,000, which is about 60% of Iceland’s population of 300,000 people. Iceland was settled by Norwegian and Celtic immigrants during the late 9th and 10th centuries A.D. According to the medieval Book of Settlements, Ingólfur Arnarson – the first settler of Iceland – built his farm on the peninsula where Reykjavík stands today. The place was named Reykjavík – “Smoky Bay” – after the columns of steam that rose from the hot springs in the area and made such a profound impression on the original settlers. Many centuries later, around the middle of the 18th century, a small town started to grow around the farm of Reykjavík, thanks to Royal Treasurer Skúli Magnússon, known as the Father of Reykjavík, who established wool workshops at Reykjavík as part of his efforts to modernise the Icelandic economy. This led to the beginnings of urban development at Reykjavík. Reykjavík received its town charter in 1786. The Icelandic parliament, Alþingi, was founded in 930 AD at Þingvellir in the southwest. In 1798 the Alþingi was abolished, but in 1845 it was re–established in Reykjavík, where the country’s government and administration were now located. In due course, when Iceland won Home Rule and then independence from Danish rule, Reykjavík became the capital of Iceland. With the rapid economic progress of the 20th century, Reykjavík grew steadily, but developed especially fast in the second half of the century. For a living view of Reykjavík‘s past, visit the open–air Reykjavík City Museum– Árbæjarsafn, located in the eastern part of the capital. The innovative Reykjavík 871 +/– 2 Settlement Exhibition is 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.