This article is from the Nordic countries FAQ, by Antti Lahelma and Johan Olofsson, with numerous contributions by others.
The first Icelandic literature was written down some two centuries after the
island was settled in the 9th century. It can be divided into three
categories:
1. Eddic poetry, i.e mythological and heroic poems
2. skaldic poetry, or court poetry in praise of some event or person
3. saga literature -- prose works ranging from fairly factual history
writing to pure fiction.
 
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