When the volcano Katla erupted in 1918, a huge flood occurred in South Iceland. A smaller flood actually washed away the bridge of the river Múlakvísl in 2011 in the same area. It was expected that Katla would erupt after Eyjafjallajökull, because that sequence of events was also found in 1612 and 1823.
Occasionally, these floods become so big that the discharge exceeds the Amazon river. Therefore we say jokingly that the biggest river of the World is in Iceland.
The plain where the flood happens is called Mýrdalssandur, and the rivers Múlakvísl and Blautakvísl flow through the area. So for the eruption of Katla that started almost 100 years ago, the flood area is shown here on the Google map:
As for the tectonics of the area, a combination of SE-NW features of mantle alignment and NS topography leading the flow of rivers can be detected.