See note on methodology

I admit this one took me by surprise. I had read it, of course; published in 1991, a careful exploration of three millennia of philosophy for younger readers, it is very clearly set in Norway even if that doesn't add much to the story.  I had completely forgotten the setting, and you probably have as well. By a huge margin, the most widely owned book on both LT and GR that is set in Norway is:

Sophie's World / Sofies verden, by Jostein Gaarder

this wins only because I have had to brutally disqualify a book by a well-known British writer of Norwegian ancestry, in which our hero and his grandmother battle supernatural beings in Norway. I checked with my fifteen-year-old resident expert in this particular author's works, and he confirmed my suspicion that most of the action takes place in England, so despite its immense popularity, I can't allow it. It is:

The Witches, by Roald Dahl

The book most frequently tagged "Norway" on LibraryThing is a 2003 novel, translated into English in 2005, about the Nazi occupation of Norway and its aftermath, winner of the 2007 Dublin IMPAC Award. It is:

Out Stealing Horses / Ut og stjæle hester, by Per Petterson

Goodreads is a bit more highbrow on this occasion. The book most frequently tagged "Norway" there is an 1890 novel about a young man wandering the streets of the Norwegian capital in a state of heightened awareness; it helped to win its author the 1920 Nobel Prize for Literature. it is:

Hunger / Sult, by the Norwegian author Knut Hamsun

Bubbling under, very much to my surprise: Hendrik Ibsen, Jo Nesbø. Both A Doll's House and The Redbreast came close but are definitely behind the first two mentioned.