The city is Dublin, Ireland. The place is a city rooftop not far from the O'Connell Bridge and the Four Courts and overlooking a quiet street. The time is a moonlit night sometime in June of 1922 during the Battle of Dublin. All is not quiet in the city, however, for rifles and machine guns punctuate the night air. The Irish Civil War is raging as the Republican sniper lies on the roof, looking for a Free State target.

As the sniper watches the street below, he dares to light a cigarette, and a bullet suddenly comes whizzing at him. He peaks over the parapet in front of him, and another bullet flies by. There is an enemy sniper across the street.

As the sniper watches, an armored car appears on the street below, and a woman comes around the corner to talk to a man in the car. She points to the sniper's location, and the sniper knows that she is an informer. The sniper kills both the man and the woman, but the enemy sniper hits him in return.

The sniper then tricks his enemy counterpart into revealing his position and fires his revolver, hitting the other sniper and sending him over the parapet of his own rooftop hiding place above a barber shop. The sniper crawls down to the street below to look at his dead enemy, wondering if perhaps he might know him. He does indeed. The dead man is his own brother.

The historical setting of the short story "The Sniper" by Liam O'Flaherty is the Irish Civil War, which took place from late June 1922 to late May 1923. The Irish War of Independence had just ended, and the United Kingdom had proposed the Anglo-Irish Treaty, which would create a self-governing Irish state. However, many members of the Irish Republican Army (IRA) objected to the terms of the treaty, so the Irish began fighting among themselves between those who opposed the treaty and those who supported it.

More specifically, "The Sniper" takes place during the Battle of Dublin, which occurred during a week at the beginning of the Irish Civil War from June 28 to July 5, 1922. To confirm this, the story mentions "the long June twilight." This was a period marked by intense street fighting in Ireland's capital city.

As for the physical setting of the story, O'Flaherty mentions that the sniper can see the "dark waters of the Liffey." The Liffey is a river that runs through the midst of the city of Dublin. O'Connell Bridge, which spans the River Liffey, is also mentioned. The sniper can hear guns firing at the battle of Four Courts. The Four Courts is the site of the Supreme Court of Ireland and other courts in the center of Dublin. This building had been occupied by anti-treaty IRA members. Following a tense standoff, the Irish National Army began to bombard the Four Courts, using British artillery.

We see, then, by the background O'Flaherty provides in his story that the sniper must have been right near the middle of the action during the Battle of Dublin. Specifically, he is on a rooftop near the bridge on a moonlit night. His job seems to be to watch the road and kill any members of the opposing forces that he spots.

There are a couple of important points to note about the setting of the story. Firstly, it takes place in Ireland during the civil war of 1922–1923. Specifically, the story is set in Dublin, and O'Flaherty uses imagery to demonstrate to the reader just how violent and chaotic the city was during this period. He talks about the noise of "machine guns" and "rifles," for example, which destroy the quiet of the night.

Looking deeper into the setting, the story's events take place on a rooftop near to O'Connell Bridge in central Dublin. It is June and night is just setting over the city. Except for the gunshots, the city is quiet.

The two main characters of the story reflect the turbulent setting: one is a Republican sniper, the other a Free-State sniper. These men are enemies, divided by the treaty which Great Britain has offered Ireland.

Liam O'Flaherty's short story "The Sniper" takes place in Dublin during the Irish Civil War. The author tells us it is specifically set on the rooftops near the Four Courts, an important government building. The Liffey River, which runs through the city, is also nearby. It is an otherwise peaceful urban setting that has been rocked by war. O'Flaherty writes:

Dublin lay enveloped in darkness but for the dim light of the moon that shone through fleecy clouds, casting a pale light as of approaching dawn over the streets and the dark waters of the Liffey. Around the beleaguered Four Courts the heavy guns roared. 

In the summer of 1922, a street battle broke out in Dublin between the Irish Republican Army, who disagreed with the recent treaty that the Provisional Government had negotiated with Britain, and Free State troops of the Provisional Government. The treaty made Ireland a free state within the British Commonwealth. The Republicans wanted to eliminate any ties with Britain. That summer, members of the Republican Army barricaded themselves inside the Four Courts. Eventually a large explosion, which destroyed important historical records, ended the stand off.

The story centers on a Republican sniper on a rooftop near the government building, probably there to help protect the men inside the Four Courts. The plot centers around his battle with a Free State sniper who turns out to be his brother. The war divided families and it was not uncommon for men from the same family to fight on opposing sides.