Learn Icelandic: Það er skýjað og mjög dimmt.

In Icelandic, just like in English, weather sentences need a subject, even though there isn't a specific person or thing doing the action. We use það (it) as a "dummy subject" to fill that grammatical role. You can't just say "Is cloudy."

Why do the words skýjað and dimmt end with -ð and -t?

Adjectives in Icelandic change their endings to match the gender of the noun or pronoun they describe. Because the dummy subject það is a neuter word, the adjectives describing the weather must also be in their neuter forms. The neuter ending for adjectives is often -t (like dimmt) or -ð (like skýjað).

Could I just drop Það and say Er skýjað og mjög dimmt?

In proper written Icelandic, no. The sentence needs a subject. However, in very casual spoken Icelandic, people sometimes drop það when talking about the weather and just start with the verb. Still, as a beginner, it is best to always include það to build good grammar habits!

Can I use dimmt to talk about dark colors, like a dark shirt?