The TOEFL test (Test of English as a Foreign Language) measures ability to use and understand English at a university level. It also evaluates how well you combine your listening, reading, speaking and writing skills to perform academic tasks.
Registration for the TOEFL exam and all necessary information about the exam, including where it is held is available at ets.org.
The home based TOEFL test is currently considered a valid test by the University of Iceland. This only applies to TOEFL English proficiency test but not to other similar home based tests like IELTS.
Possible exemptions from submitting proof of English proficiency can be found on the Proof of English Proficiency Requirements page.