Learn Icelandic: Þegar hann sá afa, kom æskan aftur. - When he saw grandpa, the youth came back.

This is the V2 (verb-second) rule. The entire "when" clause (Þegar hann sá afa) counts as the first piece of information in the sentence. To keep the main verb in the second position, kom must come right after the comma, before its subject æskan.

Does þegar work for asking "When?" as well?

No, þegar is only used to connect ideas, meaning "at the time that" for past or future events. To ask a question like "When did he see grandpa?", you have to use the question word hvenær.

Why is the word for grandpa spelled afa here instead of afi?

The verb sjá (to see) requires the person or thing being seen to be in the accusative case. Here, the verb is in the past tense (sá), but it still forces the dictionary form afi to change to its accusative form, afa.

Why doesn't afa have a definite article (the attached "the")?

When Icelanders talk about close family members like afi (grandpa) or amma (grandma), they usually drop the attached "the" and just use the base word. This is very similar to how we just say "grandpa" in English instead of "the grandpa".