This is the 540th most frequent Icelandic word.
liðinu
"Team" or "the team" (dative case, singular).
In this sentence, "Liðinu" refers to 'the team' in the dative case, indicating the recipient of the promised rewards.
Liðinu var lofað verðlaunum fyrir sigurinn.
The team was promised rewards for the victory.
Here, "liðinu" is not present, but if we were to rewrite it as referring to 'our team' in dative case receiving action, it would be similar in context.
Við styðjum alltaf við liðið okkar í keppnum.
We always support our team during competitions.
In this instance, the word "liði" is used in the dative singular form as part of a possessive construct.