Hafnarfjörður is in many ways dominated by its neighbour Reykjavík. However, it is also a separate town with its own centre and independent town spirit. It forms a sort of second centre of gravity in the greater Reykjavík area or the greater Hafnarfjörður area as some locals call it, with most of the suburbs having formed between these two towns. The name of the town means harbour-fjord and Hafnarfjörður has a large harbour, used both for imports/exports and fishing. It also has some of the most important industrial areas around the capital.
The old town of Hafnarfjörður is what most people come to see. Despite its growth and becoming part of the much larger capital area, Hafnarfjörður retains a village charm in its heart, with small wooden buildings and narrow winding streets. You get the feeling of a place where everybody knows their neighbours.
One of the things that has helped Hafnarfjörður retain this status is how the town is planned and built around nature. It sits in the middle of a lava field, and in many places the lava formations have remained untouched, giving the town a very organic feel to it. This is what gives Hafnarfjörður the nickname "the town in the lava," and it is also partly because of this that the town has become increasingly associated with legends of the Icelandic elves in recent years.