5

According to wikipedia:

Between 1050 and 1350 Icelandic began to develop independently from other Scandinavian and Germanic languages;

Why did it begin then? Iceland was being settled from 874.

Did immigration from Scandinavia decrease dramatically (If so, why?)? Did something in the political climate in Iceland or Scandinavian change dramatically? Did the formation of the Icelandic Commonwealth enable the island to act with much more cultural autonomy?

3

Iceland was economically isolated by its almost complete lack of trees for wood and pitch. Once the ships involved in the Landsnam operation had worn out -- this is the immigration period to which you referred -- only Norwegian-owned ships visited Iceland, and then only for occasional commerce (these visits required staying the whole winter). Through several centuries of this isolation, combined with a completely rural population distribution, it may be no surprise that mainland Scandinavian speech developed in ways that did not affect, or barely affected, Icelandic speech.

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