When Siglufjordur, a small mountain town in northern Iceland, was hit by a series of storms last summer, construction workers clearing a roadway soon found themselves dodging mudslides and contending with a flooded river.

A crew member was injured, then a bulldozer broke down. A TV reporter, who arrived to survey the damage, sank into a mud pit and had to be rescued. Clearing the debris stretched into a 10-day ordeal and became a spectacle.

The culprit, locals knew, had been heavy rainfall. Or elves.

It turns out that construction workers had unwittingly dumped dirt on a rock that is special enough to have its own name in Icelandic folklore: Alfkonusteinn. The rock even has a back story that involves a human, a fairy and an enchanted elf cloth.

Icelandic elves, also called hidden people or alfar, are not tiny, pointy-eared creatures, Alda Sigmundsdottir, a journalist and the author of “The Little Book of the Hidden People: Twenty Stories of Elves From Icelandic Folklore,” said in an email. They are thought to be regal and humanlike, and a good way to think of them, Ms. Sigmundsdottir said, is as “the Icelanders’ version of karma.” Elves have been blamed for wreaking havoc on construction projects across Iceland for decades.