"Tragedy" in Lewis's eyes is quite different from earthly tragedies. While Lewis endured his share of earthly tragedies--his mother's death at a young age and his wife's death from cancer, The Great Divorce focuses on tragedies that have ramifications for the afterlife.
The Great Divorce is all about humans' choices. According to Lewis, the most significant tragedy of the human condition is that people often make the wrong choice and choose an eternity of suffering. Several examples include:
1. Many of the bus riders decide not to stay in "Heaven." They take the bus simply to see what another place is like. The narrator becomes quite discouraged as he watches ghost after ghost choose to return to Grey Town. The narrator's mentor, George MacDonald, tells him that those who make the right choice will say to God: "Thy will be done." Those who make the wrong choice will hear from God, "Thy will be done."
2. The ghost Pam, who is Michael's Mom, will not accept that her late son and she would be far happier in the mountainous land than on earth. She wants to wallow in her grief. The tragedy is not that she lost her son; it is that she could be with him eternally in a more perfect form if she would make the right choice.
3. The Tragedian/dwarf will not listen to his wife Sarah (a Bright Spirit). She tries to explain that a martyr attitude is not truly selfless and that that attitude will not allow her husband to make the right choice. In the end, he chooses incorrectly (he's not willing to give up his love of self), and disappears in a small "poof."