The island Flatey is situated on the Skjalfanda Bay. It is about 2,5 km long and 1 km wide. It is estimated that the island has risen about 1 m during the 20^th century, which is highly likely, because it is situated within a very active earthquake zone stretching to the west and east along the north coast.

The most recent earthquakes in 1934 in Dalvik and 1974 in Kopasker caused great damage to property. The inhabited island Grimsey on the polar circle is also situated within this zone. The tectonic activity of this zone is comparable to the zone between the volcano Mt. Hekla and the horticultural village Hveragerdi in southwest Lowlands.

The Flatey Island is fertile and well vegetated. Its low shoreline within the pebble ridges is dotted with lagoons. The first lighthouse was erected in 1913 and rebuild in 1963. The island was settled early in historic times and the number of inhabitants even increased during the first decades of the 20^th century. In 1942, it reached its peak, 120 people. The habitation was concentrated on the southern part of the island, where a pier was built to enhance the fisheries.

The churches on the island were annexed to the parish church of Thonglabakki in the past and their patron saint during catholic times was The Holy Virgin. In 1884, the church was abolished and in 1960, it was reconsecrated. Flatey has not been inhabited for a few decades but many people spend their summers there for relaxation, the reaping of the natural resources, and the fisheries.