It's adorable that you think Iceland somehow maintains itself without power. In the 1976 Cod War with the UK, where we the UK asserted dominion over 200 miles of their water with our superior navy, Iceland countered with its superior position to surveil Soviet movements in the GUIK gap, and it leveraged that with a powerful alliance within NATO members to get the UK to back down.
In WW2 Iceland's sovereignty was merely overridden. Britain took it over, because the Nazis had done the same in Denmark. We gave it back because the nature of our political, economic and diplomatic profile, compared to Nazism, made it advantageous for us to do so, all things considered.