The Icelandic Sagas are family stories about life in Iceland from the late 800s through about 1100. This covers the Icelandic settlement period and the period shortly thereafter. Those stories were passed down verbally from generation to generation. After the Christianization of Iceland and the adoption of the Roman Alphabet, the sagas were written down on vellum. Experts believe that most of these stories are based on historical events.
The sagas are remarkable because of the high volume of literature that was produced and how much of it remains. Because of Iceland's remoteness, its language has not evolved as elsewhere in Scandinavia. It is for that reason that school children in I
celand are still able to read much of the original text today.
Here is a list of sagas and information about each one.
Here is a site which contains the actual sagas, many translated into English.
Here is a fun site which brings it all together.
In many places in Iceland you will hear about the huldufólk, meaning hidden people. These beings are like elves and said to be similar to human beings except *most* people cannot see them. Icelanders are very rational, but they have been known to move roads to avoid disturbing "elf mounds".
Some of this is probably for tourist consumption, but there likely is an underlying belief in the supernatural. In a 2016 study by the Icelandic research group Market and Media Research, the majority of Icelanders believed in clairvoyance and mediums. According to the poll, 53.7% of respondents said that some people had the ability to contact and communicate with spirits.