Karana describes the island to us: it's "two leagues long and one league wide" and looks like a big dolphin. (By the way, a "league" is about three miles.) Is this where the island gets its name? Possibly. Or maybe it's all the dolphins that live there. Who knows?
Other items of note: the island is windy, the trees are all small, and the hills are smooth from the wind. The village of Ghalas-at is near Coral Cove and a fresh-water spring. There's another spring too, where the Aleuts are staying.
Speaking of which, Karana's father warns the villagers not to visit the Aleuts' camp. He says they're "not people who understand friendship" (2.7).
The villagers keep close tabs on the Aleuts, though. Ramo watches Captain Orlov comb his beard until it shines. Ulape, Karana's sister, thinks she sees a female Aleut. No one believes her, though.
The Aleuts also watch the villagers. Karana knows this because one day the Aleuts come asking for their share after the villagers catch several large white bass.
Two of the Aleut men ask the Chief for two fish, but he says no way. The Russian men threaten to tell Captain Orlov about the Chief's refusal. The narrator hints that bad things will come of this. (Foreshadowing alert.)