It is the committee that is based in Norway. Doesn’t mean it is Norway the country. Just like US does not control the decisions of UN just because UN is located in US.
Well, it's a bit more muddled than that, to quote wikipedia:
"
Five members are appointed by the Norwegian Parliament. In his will, Alfred Nobel tasked the parliament of Norway with selecting the winners of the Nobel Peace Prize. Despite its members being appointed by Parliament, the committee is a private body tasked with awarding a private prize. In recent decades, most committee members were retired politicians.
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Well, it's a bit more muddled than that, to quote wikipedia:
" Five members are appointed by the Norwegian Parliament. In his will, Alfred Nobel tasked the parliament of Norway with selecting the winners of the Nobel Peace Prize. Despite its members being appointed by Parliament, the committee is a private body tasked with awarding a private prize. In recent decades, most committee members were retired politicians. "