Icelandic Christmas folklore depicts mountain-dwelling characters and monsters who come to town during Christmas. The stories are directed at children and are used to scare them into good behaviour. The folklore includes both mischievous pranksters who leave gifts during the night and monsters who eat disobedient children.

The figures are depicted as living together as a family in a cave and include:

Gryla, Leppaluthi, and the Yule Cat. Gryla is a giantess with an appetite for the flesh of mischievous children, who she cooks in a large pot. Her husband, Leppaluthi, is lazy and mostly stays at home in their cave with the Yule Cat.

The Yule Cat a huge and vicious cat who is described as lurking about the snowy countryside during Christmas time and eating people who have not received any new clothes to wear before Christmas Eve.

The threat of being eaten by the Yule Cat was used by farmers as an incentive for their workers to finish processing the autumn wool before Christmas.

More Info: en.wikipedia.org