Learn Icelandic: Veðrið er slæmt. Það rignir. - The weather is bad. It is raining.

Just like in English, Icelandic needs a subject for the verb rignir (rains). Since there isn't a specific person or thing doing the raining, we use the "dummy subject" það (it) to fill that grammatical spot.

How come the word for "bad" is slæmt here instead of the dictionary form slæmur?

Adjectives in Icelandic change their endings to match the gender of the noun they describe. Because veður (weather) is a neuter noun, the masculine dictionary form slæmur must change to its neuter form, slæmt.

Where is the word for "the" in Veðrið er slæmt?

In Icelandic, "the" is usually not a separate word. Instead, it gets attached directly to the end of the noun. The base word is veður (weather), and adding the neuter ending -ið gives us veðrið (the weather).

The translation says "is raining", but why isn't there a word for "is" in Það rignir?

Icelandic doesn't have an "-ing" tense (present continuous) like English does. The single present-tense verb rignir covers both "rains" and "is raining" depending on what makes sense in context.