Mention huldufólk (hidden people) in Iceland and you’re likely to get a variety of reactions. Few will openly admit to believing in the existence of other people, very similar to humans, who live in little houses in the rocks and are only seen by a privileged few.

 
Yet if you dig a little deeper, almost everyone will have a story of an encounter with elves or huldufólk, often involving a close friend or family member...

Read more about Iceland's Huldufólk in this article from National Geographic Traveller.