Re: Dunbar's Number and medieval Iceland - the basic social unit in medievall Iceland was the same as it was in Beowulf: the Chieftain's holding, with his family, tenants, dependents,and household. And those would be less that 150 people in number, or possibly around that number. Then - and remember the fractal nature of medieval society - the group of such chieftains and the handful of supporting professionals (the priests in the Christian era, the law-speakers, etc) was probably even smaller. When the Allthing met, everyone who could or who had business there showed up, but not everybody spoke.
I'm going to say it was neither an anarchy nor a democracy, though the system of folcthing and Allthing was a lot closer to it than most medieval and early modern states, but as Brian Rush said, a protostate.
BTW - I've working towards a minor in Medieval Studies with a concentration on Anglo-Saxon England, which gets us into then entire Nordic/Germanic way of doing things. If you look back at pre-Classical Greece and Rome, at the Northern European countries, and at states like Iceland everywhere, you see the same structure over and over again: a bunch of people working the land and/or herding the cattle, working for a landowner/chief (thane, baron, chieftain) who may or may not answer to a regional chief (earl, count, high chief) depending on the size and complexity of the society, who may or may not answer to a king. Depending again on size and complexity. Anything that widespread may simply be the optimal way of doing things under the conditions that prevail (agricultural economy, dangerous conditions).
How to spot a shill, by John Michael Greer: "What you watch for is (a) a brand new commenter who (b) has nothing to say about the topic under discussion but (c) trots out a smoothly written opinion piece that (d) hits all the standard talking points currently being used by a specific political or corporate interest, while (e) avoiding any other points anyone else has made on that subject."
"If the shoe fits..." The Grey Badger.