It is a definition which simply states that Scandinavia = Denmark, Norway and Sweden, and Norden/Nordic is Finland and Iceland too.
I guess the reason is a mix of culture, language and history. Danish, Norwegian and Swedish usually can be understood in all three countries, which isn't the case for Icelandic and certainly not for Finnish (probably one of the most complicated languages to understand, speak or learn - I understand they have 20+ casus!). When the idea of pan-scandinavism was born in 19th century, is was on the background of the history of three independent Kingdoms, those of Denmark, Norway and Sweden (the three crown symbol from both Danish and Swedish coat of arms refers to these three Kingdoms). Iceland was part of Denmark and before that had been part of Norway, and Finland was part of Russia and before that of Sweden. Norway in most of 19th century shared a King with Sweden, and in 15th-18th century with Denmark, but had a degree of "home rule", and anyway a background as independent Kingdom.
When the ideas re-emerged after WWI it was as the "Nordic idea", not at least bacause the Swedes insisted that Finland wasn't left alone outside and all the nations anyway had great sympathy for the Finns and their strugle for freedom. In the world of "real-politik" it however was impossible to unite Norden over the borders of great power interests. Today nobody mention the Nordic idea any longer, and Scandinavians to an increasing degree speak English with each other. But I personally keep one part of the old traditions alive - when I visit Norway or Sweden it usually is for a kill or two - although it nowadays is wild game and not people. Got a boar recently in Sweden and go hunting in Norway in 10 days
Regards
Steffen Redbeard
Thank you for your answer. I understand "Scandinavia" as it is commonly used is a historical concept, born at a certain time among (a) particular interest group(s).
I like for us to dissect the term here because it is interesting, not to say controversial, in the context of Finnish nationalism and politics.
When the Finnish nationalist movement was born in the 19th century, it was very much crystallized in the phrase coined by A.I. Arwidsson, "Swedish we are not, Russians we do not want to be, let us be Finns". The Finnish identity was built on the idea of Finland being "not of the East", not "Russian" and not tainted by all the negative ideas of, say, laziness, byzantine politics and oppression attributed (more or less fairly) to it. The Finnish state was to become a nation after the Western model, enlightened, democratic and modern, diffused with what was considered the "essential Finnish national character": honesty, frugality and trustworthiness presided over by a sombre, stolid Lutheranism. The great national quest became to rise from obscurity and the shadow of "the East" and join the "civilized world", ie. "the West", and assert our right to stand as a member among that secular pantheon of nations. A sort of national eschatology, as it were, with that certain Paradise as the ultimate object.
It is easy to see that in many ways the framers of this ideology considered the Swedish as model, and why not, they had achieved mature nationhood much earlier, inhabited a similar land and adhered to the same creed. Basically, the Finn was considered pretty much like a Swede, even if one little (or more) less well off, less fashionably dressed and not so eloquent but making up those deficiences in strength of character and hard work.
It was just the fact of being disconnected from Sweden that made Finnish nationalism being built, side by side, separate but still connected, to Swedish nationalism, not in direct opposition to it as was with Russian nationalism. This happened in spite of the campaign by part of the Swedish-speaking intelligentsia in Finland to actively discredit the possibility of the Finnish culture and language ever becoming "fit for civilization": it was like growing in a shadow of a big brother, whom you much admired, but who constantly and unfairly derided you for your (real or imaginary) shortcomings.
The Finnish political leadership of the early 20th century was very much raised in this atmosphere. After independence was reached, they naturally sought to "reconnect" Finland with the "Scandinavian" community. Some headway was made, but frequently it seemed the Swedish were not so keen to make Finland welcome as they would have wished. They even attempted to annex part of the young nation (Åland). Overtures for defensive arrangements were rebuffed, and Finland left to fend for itself against the Red Menace.
When the school books exhorted the students that Finland was part of the West and the Swedes were our friends and mentors since time immemorial, the coldness of the Swedish state and nation was hard to understand. Many people who lived through the war have told me that when the Winter War begun, it was very much a national shock that Sweden did not officially join Finland in the fight against "the East". It was as if they did not care! Despite all we had in common!
After this long prologue, let's return to "Scandinavia". When, someone says that Finland is Scandinavian and someone, say, a Swede, insists that that is not the case, some Finns might find it an affront. From the Finnish nationalist perspective, outlined above, this exclusion seems petty and unfair. "Is common culture and history nothing? Lutheran religion and democratic system not enough?" Our imaginary Finn might event go as far as to put out a rant such as "You force your religion on us, make us use your language in anything official and take it as your prerogative to rule us - for centuries. We take care of our land - for you to benefit. We fight your wars for you. When we are in the greatest peril of all, you abandon us. Still, we manage to build our nation up, as affluent and enlightened as yours. And yet, we are still not good enough to join your little club?"
You see, of course there is a certain inferiority complex there. In regards to Sweden, I think Finns might never get it out of our national system. But still, when all kinds of good and beautiful attributes are connected to "Scandinavian" many a Finn would want to be part of that little club. (Re)joining "the West" and "Scandinavia" and solidifying our presence there was -and is- to many people here the very raison d'être of the Finnish state and nation. These people are very likely to regard "Scandinavian" a badge of honour and to be left out of that category, something else entirely, especially considering "all the work and sacrifices" Finland has had to endure to (re)join "the West". This model of thinking is dialectic: either "West" or "East". If we are not accepted by those we consider our equals in "Scandinavia", we are left with "Eastern Europe" (of which "Baltic" is a subset).
Like I wrote above, this is very much due to the way Finnish nationalist ideology was built in the period, say, 1830 to 1930. Not all Finns think like this, but I think this aspect of Finnish nationalism is something that can be of help considering Finland's position in Northern Europe (and vis-a-vis "Scandinavia" or "Norden") IOTL or any possible timeline with a PoD within the last 200 years. I hope you find this useful in understanding Finland or Finnish trains of thought.