why is cyclohexane used in chemical displacement reactions of halogens?Watch this thread
Halogens are poorly soluble in water, the colour isn't very intense and the colours of Br2(aq) and I2(aq) can be rather similar - orange and brown are effectively just shades of each other: Br2(aq) with a high conc can be darker than I2(aq) with a low conc.
So... adding a non-polar solvent allows the halogens to dissolve fully, which makes them darker and avoids the Br2/I2 problem as the I2 will appear purple, so you won't get confused with Br2.
Iodine (and the other halogens) being non-polar do not dissolve in water, but they do react with water a little to set up an equilibrium between the molecular species and the reaction products:
I2 + H2O <==> HI + HOI
This is a disproportionation reaction and HI, being a strong acid, dissociates into hydrogen ions and iodide ions. These iodide ions can interact with molecular iodine forming the orange/red species triiodide ion, I3-.
So aqueous iodine actually does not show the colour of iodine, rather the colour of the triiodide ion. But when it is dissolved in a non-polar solvent you get separation of the iodine molecules and the purple colour of the iodine molecules, the same as in the vapour.