Reykjavík ( ; ) is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. Its latitude is 64°08' N, making it the world's northernmost capital of a sovereign state. With a population of around 131,136 (and 233,034 in the Capital Region), it is the centre of Iceland's cultural, economic, and governmental activity, and is a popular tourist destination. Reykjavík is believed to be the location of the first permanent settlement in Iceland, which, according to Landnámabók, was established by Ingólfr Arnarson in 874 CE. Until the 18th century, there was no urban development in the city location. The city was officially founded in 1786 as a trading town and grew steadily over the following decades, as it transformed into a regional and later national centre of commerce, population, and governmental activities. It is among the cleanest, greenest, and safest cities in the world. History According to legend, the first permanent Norse settlement in Iceland was established at Reykjavík by Ingólfr Arnarson around the year AD 870, as described in the Book of Settlement. Ingólfr is said to have decided the location of his settlement using a traditional Norse method: when land was in sight, he cast his high seat pillars overboard and promised to settle where the gods decided to bring them ashore. Two of his slaves then searched the coasts for three years before finding the pillars in the bay which eventually became the site of Reykjavík. Etymology The name is of Old Norse origin, derived from the roots ('smoke') and ('bay'). The name is said to be inspired by steam rising from hot springs in the region. The original name was Reykjar-vík, with an "r" suffix for the genitive singular of reykr; the modern version reykja- uses the genitive plural. The name's meaning is still transparent in modern Icelandic. The name originally referred to both the bay on the northern shore of the modern city centre, between and Laugarnes, as well as the estate and farm of Ingólfr Arnarson. This form of the name fell out of use shortly after settlement, and the estate was referred to as Vík á Seltjarnarnesi until the name Reykjavík was revived when urban development began centuries later. The name has been translated as Bay of Smoke in English language travel guides, or variations thereof, such as Smoky Bay, Smoke Cove, Steam