The Icelandic sheep breed probably stems mostly from Norway and has not undergone much cross-breeding since being brought to Iceland during the settlement. The Icelandic breed is a representative of the horned, short-tailed sheep of northern Europe, and most closely resembles the Norwegian short-tailed sheep.
While white wool is the most common colour in Icelandic sheep, a great many sheep have other colours or mixed colours. Both horned and polled animals are present, regardless of sex, and four-horned sheep also exist. Leader sheep make up a special line within the Icelandic breed and have always been held in great esteem.
In Iceland, sheep ears were marked to identify the animals for their particular farm through its officially registered earmark. This method of identifying property was used in a much more conclusive manner in Iceland than in other European countries, with clear examples displayed here in the earmark register.
From the time of settlement (in the late ninth and early tenth centuries) until nearly 1900, raising sheep was Iceland's most important field of employment. This country's farming society adapted itself to the needs of sheep: lambing in spring, making hay in summer, slaughtering in autumn and working with the wool in winter. People and sheep lived in a close relationship, frequently in the face of extreme hardship.
Today, sheep farming remains a significant part of Icelandic agriculture, even though its economic importance has decreased as the country's society and economic activity have diversified.
Source: woolandsheep.com