This is the 881st most frequent Icelandic word.
heimaey
"Heimaey" means "Home Island" and is the largest island in the Vestmannaeyjar archipelago, Iceland.
Here, 'Heimaey' is used as a proper noun, the name of a specific island.
Heimaey er stærsta eyja Vestmannaeyja.
Heimaey is the largest island of the Vestmannaeyjar.
In this case, 'heimaey' is used generically, suggesting an island that is considered home.
Við heimsóttum heimaey um sumarið.
We visited the home-island during the summer.
'Heimaey' here is again used as a proper noun, referencing the island known as Heimaey.