It was roughly the area to the north of a line drawn between between London and the river Mersey. It was established as a result of the Treaty of Wedmore in the late 9th century, after Alfred the Great had defeated the Viking Guthrum at the Battle of Edington. The Danelaw represented a consolidation of power for Alfred; the subsequent conversion of Guthrum to Christianity underlines the ideological significance of this shift in the balance of power.

Five fortified towns became particularly important in the Danelaw: Leicester, Lincoln, Nottingham, Stamford and Derby. These strongholds became known as the "Five Boroughs". "Borough" derives from the Old English word "burg", meaning a fortified town.

The Danelaw was gradually eroded by Saxon raids in later years, but the influence of this period of Scandinavian settlement can still be seen in the North of England and the East Midlands, most evidently in place names: name endings such as "by" or "thorp" being particular giveaways.

Old Norse and Old English were still mutually comprehensible, and the mixed language of the Danelaw caused the incorporation of many words into the English language, including the word law itself. Many Old Norse words still survive in the dialects of Northeastern England.