Egilsstadir is the capital of the East and Fellabaer is a village on the opposite bank of the glacial lake/river Logurinn. Both communities are situated inland, in the largest lowland area of the East, where the climate is mild in summer and cold in winter, almost continental. Egilsstadir received its municipal rights in 1987 and the inhabitants of both communities base their livelihood on services rendered to the surrounding agricultural areas, tourism and commerce.