The population of Iceland when it was independent has often said to have been around 70 000 but recently this number has been getting a little smaller. These estimations are f.e. based on 2 polls and they were made in 1100 and 1311 (Iceland lost it's independence in 1262/1264 (different areas became part of Norway at different times)).
Iceland's population compared to other countries (if f.e. a 50 % is written next to a country in at a specific time then that country had two times Iceland's population at that time):
.............1100...................1200.......... ...........1300....................1400
Norway: 28 %...............27,90 %....................27,75 %..............7,5 %
Scotland: 23,75 %.............21 %.......................19 %................16 %
Scandinavia: 7,75 %..........7,70 %..................7,5 %.................7, 75 %
England: 4 %....................3,50 %...................3,25 %................3 %
Europe: 0,16 %.................0,12 %...................0,08 %................0,10 %
But I checked how the situation is in the game at three specific dates, 1066, 1200 and 1337 and compared Norway's max levys and income to Iceland's max levy's and income.
(And by Norway I mean mainland Norway, the duchies of Jamtland, Trondalag, Vestlandet and Ostelandet plus the county Viken, I did not include the islands such as the faroe islands and Orkney Islands).
1066
Norway:..........................................I celand:
max levy: 5671................................max levy: 567
max income: 225,2...........................max income: 21
1200
Norway:.................................Iceland:
max levy: 35 860.....................max levy: 3520
max income: 626,1..................max income: 65, 9
1337
Norway:.................................Iceland:
max levy: 45 840....................max levy: 3670
max income: 801,1..................max income: 81
So Norway has roughly 10 times more manpower and income at each time but Norway had historicly only about 4 times more people. So if Iceland historically had as many soldiers per 1000 inhabitants as Norway had and the income from Iceland was in correlation with its population Iceland could be made stronger. If Iceland's manpower and income would be doubled this game would be closer to history.
Or is Norway maybe overpowered ? Or are there other estimates that say that Norway had a larger population Since I know of no easy way to find out how large the maximum levy of countries are I only checked Norway. Maybe Iceland's levy's and income make sense compared to f.e. Scotland. But on the other hand 6000-7000 in max levy might not be to much, in the year 1121 2300 men from an area that had about 55 % of Iceland's population were about to fight because 2 gošar with 2 gošoršs were fighting and they each had many allied gošar of their side. If that battled had not been avoided at the last moment I believe that would have been the largest battle in Icelandic history. So maybe Iceland's max levy in the later start dates should be about 6000 men.