We live in Shetland!

The choice of prepostions can be telling. We all live IN a community or place. And in Shetland dialect you live IN Shetland / Burra / Fetlar / Yell, while you stand ON a stone / holm (small, uninhabited island) / roof / chair / ladder. It is common for island communities worldwide to live IN their islands. To "correct" this to "on" would be misguided and would indicate a distancing that could risk being alienating to the islander.