The Icelandic horse is a breed of horse that has lived in Iceland since the mid-800s AD, having been brought to the island by Viking settlers. The Icelandic Horse originated from breeds taken from Scandinavian and European countries to Iceland during the original and subsequent settlements but has now been bred for centuries without the addition of outside bloodstock. Because they are often pony-sized, they are by some referred to as "Icelandic ponies". However, in most places, the breed is considered a "horse" and to call it a "pony" is likely to offend many breeders. Iceland.