You conveniently cherry picked that article for the things that supported your argument, and left out the entire first half of the article, which described how it worked for that 290 years. For example:
Iceland did not have an executive branch of government. Instead of a king they had local chieftains. One permanent official in their system was the "logsogumadr" or law-speaker. His duties included the memorization of laws, the provision of advice on legislative issues, and the recitation of all legislative acts one time while in office.
Instead of a judicial branch of government there were private courts that were the responsibility of the godar. To solve disputes, members of this court system were chosen after the crime happened. The defendant and plaintiff each had the right to pick half the arbitrators. There was another level of courts called the Varthing. This was a Thing court in which the judges were chosen by the godar of the Thing. David Friedman has found that these courts were rarely used and not much is known about them.1 Then there was the National Assembly or the Althing. Each quarter was represented by their own Althing. If a dispute was not settled by the private courts, the dispute would go up the ladder to the next highest court until the dispute was resolved.
There was no public property during the era of the Vikings in Iceland, all property was privately owned.
The settlers of Iceland divided the country into 4 regions. Each region had 9 godord and the godord were divided into three things. The godord were divided into groups of three and each thing had three godord.
and still more, that I think is very important, that you have misrepresented through omission:
Iceland collapsed in the year 1262, 290 years after it was founded. Roderick Long points out that it only took 85 years for the United States to have its first civil war. That Iceland lasted so long is impressive.
The collapse did not occur until after almost three centuries of relatively peaceful living had gone by. Roderick T. Long states, "We should be cautious in labeling as a failure a political experiment that flourished longer than the United States has even existed."
And this article did not mention the part played by the catholic church as they moved in and manipulated things with their money from Rome. This was how the monopoly developed.
Sure, they didn't have a defence against this outside party funding a breakup of their legal system, but 290 years of greatly reduced warfare and violent crime still needs to be accounted for.