Scandinavia is the region of the Scandinavian Peninsula.
The usage and meaning of the term Scandinavia is somewhat ambiguous:
The movement proposed the unification of Denmark, Norway and Sweden into a single united kingdom. The background for this was the tumultous events during the Napoleonic wars in the beginning of the century leading to the partition of Sweden (the eastern part becoming the Russian Grand Duchy of Finland in 1809) and Denmark (whereby Norway, de jure in union with Denmark since 1387, although de facto merely a province, became independent in 1814 and thereafter was swiftly forced to accept a personal union with Sweden).
Finland being a part of the Russian Empire meant that it would have to be left out of any equation for a political union between the Nordic countries. A new term also had to be invented that excluded Finland from any such inspirations, and that term was Scandinavia. The geographical Scandinavia included Norway and Sweden, but the political Scandinavia was also to include Denmark. Politically Sweden and Norway were united in a personal union under one monarch. Denmark also included the dependent territories of Iceland, the Faroe Islands and Greenland in the Atlantic ocean (which however historically had belonged to Norway, but unintentionally remained by Denmark according to the Treaty of Kiel).
The end of the Scandinavian political movement came when Denmark was denied military support from Sweden-Norway to annex the (Danish) Duchy of Schleswig, which together with the (German) Duchy of Holstein had been in personal union with Denmark. It followed a brief but disastrous war between Denmark and Prussia (supported by Austria, the Second war of Schleswig in 1864), Schleswig-Holstein was conquered by Prussia, and after Prussia's success in the Franco-Prussian War a Prussia-led German Empire ("2nd Reich") was created, and a new power-balance of the Baltic sea countries was established.
Even if a Scandinavian political union never came about there was a Scandinavian Monetary Union established in 1873, with the Krona/Krone as the common currency, and which lasted until World War I.
The modern Scandinavian cooperation after World War I also came to include the independent Finland and Scandinavian as a political term came to be replaced by the term Nordic countries, and eventually by the Nordic council institution, in 1952.
Etymology
The name Scandinavia is most probably derived from the Germanic *Skathin- meaning "danger" (cf. English scathing and unscathed) and *awjo meaning "island". It may have referred to the dangeous banks around Skanör-Falsterbo in Scania in southern-most Scandinavia. Scandinavia appears in Roman texts, and in Jordanes history of the Goths as Scandza.
The name of the Scandinavian mountain range, Skanderna in Swedish, is in turn derived from Skandinavien in the 19th century, analogous with Alperna for the Alps. The commonly used names are Kölen "the Keel" or fjällen "the fells, the mountains".
See also: Scandinavian languages