In the early 1800s Denmark & Norway joined forces with Napoleon, who was sweeping over Europe, however with the loss of Napoleon's France, Denmark and Norway parted ways, leaving Iceland solely under the authority of Denmark. This did little to help the still disastrous conditions in Iceland, which continued to suffer as more of their population either died or emigrated (primarily to Canada) during the 1800s.
Throughout the 1800s though, Iceland grew a stronger identity and pride, resulting in movements that encouraged Denmark to give the island limited self-rule in the late 1800s. This movement continued in the early 1900s when Denmark gave Iceland a degree of independence, although Denmark continued to handle numerous issues including diplomacy and military defense.
Near the start of World War II (WWII), Denmark was occupied by Germany so most Danish governmental affairs were shifted to Iceland, however with no true defense, the British, and later the Americans protected and occupied (with Iceland's approval) the island until the war ended.
In 1944 Iceland was given the decision to remain with Denmark or to declare an independent country; the people overwhelmingly choose to gain independence. Since this time, Iceland has become somewhat active on the international stage as they joined NATO and allied with the United States for defense protection. However, Iceland has decided to remain out of the European Union (EU).