This flag marks the spot of the ancient Alþing - the ancient parliament that was first held in 930 A.D. and has been held almost continually (although moved to Reykjavik in 1844). It is considered the world's oldest parliament that still exists. The spot is a point of considerable Icelandic national pride.
This image is from the presentation "A Tour of Elemental Iceland - Reykjavik and Þingvellir".
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