The oldest preserved texts in Icelandic were written around 1100. Many of them are actually based on material like poetry and laws, preserved orally for generations before being written down. The most famous of these, which were written in Iceland from the 12th century onward, are without doubt the Icelandic Sagas, the historical writings of Snorri Sturluson and eddaic poems.
The language of the era of the sagas is called Old Icelandic, a western dialect of Old Norse, the common Scandinavian language of the Viking era. Old Icelandic was, in the strict sense of the term, Old Norse with some Celtic influence. The Danish rule of Iceland from 1380 to 1918 has had little effect on the evolution of Icelandic, which remained in daily use among the general population and Danish was not used for official communications. The same applied to the U.S. occupation of Iceland during World War II which was gradually withdrawn in the 1950s.
Though Icelandic is considered more archaic than other living Germanic languages, important changes have occurred. The pronunciation, for instance, changed considerably from the 12th to the 16th century, especially of vowels.
The modern Icelandic alphabet has developed from a standard established in the 19th century, by the Danish linguist Rasmus Rask primarily. It is ultimately based heavily on an orthographic standard created in the early 12th century by a mysterious document referred to as The First Grammatical Treatise by an anonymous author who has later been referred to as the First Grammarian. The later Rasmus Rask standard was basically a re-creation of the old treatise, with some changes to fit concurrent Germanic conventions, such as the exclusive use of k rather than c . Various old features, like ð , had actually not seen much use in the later centuries, so Rask's standard constituted a major change in practice. Later 20th century changes are most notably the adoption of é , which had previously been written as je (reflecting the modern pronunciation), and the abolition of z in 1974.
Written Icelandic has, thus, changed relatively little since the 13th century. As a result of this, and of the similarity between the modern and ancient grammar, modern speakers can still understand, more or less, the original sagas and Eddas that were written some eight hundred years ago. This ability is sometimes mildly overstated by Icelanders themselves, most of whom actually read the Sagas with updated modern spelling and footnotes — though otherwise intact. Many Icelanders can also understand the original manuscripts, with a little effort.