'isle-dweller' is a compound of 'isle' and 'dweller'. 'isle' originates from Old French 'isle' (from Latin 'insula'), where 'insula' meant 'island'; 'dweller' comes from Old English 'dwellan'/'dwell', where 'dwell' meant 'to remain or live in a place'.

'isle' comes into Middle English from Old French 'isle' (and earlier Latin 'insula'), while 'dweller' developed from the verb 'dwell' + agent suffix '-er' in Old to Middle English, and the compound 'isle-dweller' formed in Modern English by combining these elements.

Initially the components meant 'island' and 'one who dwells' respectively, and together they have long meant 'a person living on an island'; this basic meaning has remained stable into modern usage.