'island-studded' is a compound of 'island' + past-participle adjective 'studded'. 'island' originates from Old English 'ī(e)gland', where 'īeġ' meant 'island' and 'land' meant 'land'; the modern spelling was later influenced by Old French 'isle' (from Latin 'insula'). 'studded' derives from the verb 'stud' (related to Old English 'studu'/'studu' meaning a post or ornament) combined with the past-participle suffix '-ed'.

'island' developed from Old English 'ī(e)gland' via Middle English forms and was influenced orthographically by Old French 'isle' (Latin 'insula'), while 'studded' comes from Middle English participial forms of the verb 'stud' and has long been used metaphorically to mean 'sprinkled' or 'dotted'. Together they formed the descriptive compound 'island-studded'.

Initially, 'studded' often had a more literal sense of being set with studs or ornamental protrusions; over time it took on a broader figurative sense of being 'sprinkled' or 'dotted' with something, leading to the current meaning of 'island-studded' as 'dotted with islands'.