The first thing you notice about Stockholm is the people. Not that they’re blond – although many are. Not that they look unusually healthy – although walking and bicycling are two favoured ways of getting around. It’s just that there aren’t very many of them, even in the centre of town.

Go to a park and you’ll see a few parents pushing prams. Glance across the street and you’ll see a well-dressed grandmother bicycling with her grandchild. Sit in the main square at lunchtime and you’ll notice Swedes of all ages soaking up the sun before heading back to work. Yet just when you think there’s hardly anyone around, you turn onto a street crammed with workers and shoppers, pedestrians and cars. Still, in Stockholm it all seems ordered and calm. Stockholm may be one of the world’s most serene cities and not just because there are no traffic jams, no honking horns and no fumes in the air. Sweden’s capital is built on 14 islands and the water is so clean that people fish, sail and even swim in the middle of town. In the warmer months, parks flourish from one end of the city to the other. In fact, Stockholmians are fond of saying that their home is one-third water, one-third buildings and one-third green.

The city dates back to the 13th century and its name is as straightforward as its inhabitants. It’s said that the founders pushed a log (stock) into the water to see which island (holm), the current would take it to, figuring that it would be the best place for a harbour. By the 1500s, it was a bustling medieval metropolis and a centre for European trade. That island is now Gamla Stan (Old Town) the most picturesque part of Stockholm. It’s filled with colourful, old houses and narrow, cobblestone streets, with the Royal Palace and cathedral at one end and a long shopping street with stores, cafés and basement restaurants at the other. In the middle is Stortorget, the main square, where in 1520 more than 80 political opponents were brutally executed, marking a turning point in the long Swedish struggle to throw off Danish rule. These days the square is lined with 18th century fairy tale buildings and lively cafés. But wander the quiet, narrow lanes and you can imagine what Stockholm was like in ancient times.

In the 19th century, Stockholm grew rapidly and began to resemble larger European cities such as Vienna and Berlin. The Royal Swedish Opera house was built, as was the famous Grand Hotel and many of the apartment buildings with exclusive shops and elegant restaurants along the water in Östermalm, the swankiest part of town.

During the 1960s, historic neighbourhoods were demolished to make way for high-rise office buildings and an auto circle called Sergels Torg, a decision that still causes debate. Norrmalm is modern Stockholm’s centre and the only place where you’ll see real crowds. There you’ll also find the central train station and the start of Drottninggatan (Queen’s Road), the world’s longest outdoor shopping mall. Still, you only need to take the tram or follow your feet for 20 minutes along the water, past the Royal Theatre and over another bridge to feel as if you’re in the Swedish countryside. Originally a royal park, the island now known as Djurgården is dotted with small lakes, charming restaurants, fascinating museums, a botanical garden and a zoo.

It’s also home to Skansen, the world’s largest open-air museum and the best way to see all of Sweden without leaving town. It features over 150 historic buildings, authentic houses, farms and working shops that were moved there from all over the country, representing Sweden’s history and culture from the Middle Ages to the 19th century. There you can also see demonstrations of handicrafts, as well as free performances of traditional Swedish song and dance. On Solliden, Skansen’s highest point, there are spectacular views of the city below. For a shot of cool, go to the opposite end of town. Södermalm, Stockholm’s SoHo, was until recently an industrial area with apartments for working families. It now boasts trendy clubs, second hand shops, a huge shoreline park and in summertime, casual waterside cafés. It’s young, laid-back and can get raucous on a weekend night. But even there, you can escape the crowds. Walk to the park and hang out at a shack that serves burgers and beer. Or take a 19th century elevator to the Heights, a neighbourhood that dates to the 17th century with a bird’s-eye view of the harbour and the gleaming white cruise ships from around the world.

The best time to visit is summer and spring. Cafés are open and there’s light 18 hours a day. It never quite gets dark and the sky stays a luminous lavender from sunset till dawn – perfect for exploring the city for almost 24 hours.