Iceland became a fully independent and sovereign state in 1918, under the terms of the Danish–Icelandic Act of Union. It remained freely associated to Denmark in a "personal union" with the Danish king, and it also asked Denmark to represent its interests in defence and foreign affairs, "while maintaining full control of them."
What happened in 1944 was that Iceland voted in a referendum to sever its ties with the Danish monarchy and become a republic.
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