Setting Path variable in Icarus
When you extract and install icarus, it gets installed in the path C:\iverilog\bin by default. To run iverilog, you need to keep the verilog files in this path. However, you may want to keep the source file in another directory, for example in C:\iverilog\bin\src. However, you will need to set the PATH variable to be able to do this. To set the path Go to Start -> Computer ->Properties -> Advanced System Settings -> Environment Variable -> System Variable and click on the variable named path and then click edit. Now add C:\iverilog\bin; at the and of the value . Important caution - do not delete the existing values of the variable name.
See this youtube for the complete set up.