The two speakers appear to have run into each other by chance on the street, in "Town," which could be taken to mean London, although there is no other information about the setting in the poem. The two speakers (one is called "'Melia," short for Amelia perhaps) are old friends, or potentially sisters. The unnamed speaker mentions the other's shoeless state when she "left us," the "us" here perhaps referring to their family, where they once lived together "on the barton" or farmyeard. They could be related, or coworkers. Or 'Melia could have been subordinate to this woman on the barton, which could account for the astonishment at her current state.
The other thing you can for certain about the pair is that they both come from a poor, rural background. We know that that Amelia had been "tired of digging potatoes," and that she had no "shoes or socks," and she spoke in a thick dialect, and that she has improved her circumstances that only way open to her, by being "ruined," or, in other words, prostitution. The bright tone of the poem, along with the rhyme scheme and sprightly rhythm, make an ironic contrast to the hard choice Amelia has made.
It is entirely appropriate that the dialogue in “The Ruined Maid” should take place in public, right in the middle of a town, for what the country girls are talking about—sex outside marriage—is considered deeply scandalous in this part of the world and would lead to a very public disgrace. That these young ladies are conducting such a conversation in public hints at the fate that it likely to befall one of them.
A “ruined” maid is considered as such because society regards her as damaged goods. In those days, especially in traditional rural societies, a woman was expected to be a virgin on her wedding night. Sex was supposed to take place entirely within the bonds of marriage, and even then it was purely for the purposes of procreation rather than pleasure.
And yet, despite all that, Melia seems to be doing rather well out of her current illicit relationship. As well as looking better, she's also wearing much nicer clothes, clearly bought for her by her lover. That provides an additional reason why the conversation between these two country girls should take place in the street: Melia wants people to notice that she looks like a lady now that she's been freed from the necessity of working for a living. Being a ruined maid is clearly a double-edged sword.
Further Reading
This dialogue takes place "in Town," as the first speaker says in the first stanza (line 2). Presumably, these two speakers have not seen each other in quite some time, and now they bump into one another, so to speak, in the street, in public.
The two speakers seem to be sisters, or at least close relatives who used to live together. The first speaker claims that 'Melia "left [them] in tatters, without shoes...
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or socks"; the family was evidently incredibly poor, with little to eat and less to wear, but now the young speaker sees 'Melia wearing lovely jewelry and finery. The first speaker claims that "at home," 'Melia's hands had been rough, like paws, and her face had been "blue and bleak," but now she looks beautiful and fine, and she speaks with a polish that she never had before. 'Melia, who sounds perhaps like the first speaker's older sister, claims that she has "been ruined," aeuphemism for a young woman who has engaged in sexual relations outside of marriage, and—ironically—her "ruin" has included beautiful clothing, high company, no need to "do work," and so on. It hardly sounds ruinous compared to the home life the other young woman describes, and the first speaker does not really seem to understand what 'Melia means when she claims to be "ruined." The first speaker refers to their "home life," again, making it sound as though the two are sisters, and the younger sister expresses her desire to have and be all that 'Melia now is, though 'Melia explains that she cannot expect such finery because she isn't "ruined."
Thomas Hardy's "The Ruined Maid" is written in the form of a dramatic dialogue between two young women who have known each other meet in town, Melia and an unnamed young woman. Oddly this poem has a meter of three dactyl feet followed by an iamb--a rhythm not unlike the hurried conversation of a "ruined" woman rather than the normal conversational tone of iambic pentameter, such is usually used.
Dressed well and appearing prosperous, Melia greets the poor maiden with the paradoxical answer "O didn't you know I'd been ruined?" And, in fact, the remainder of the poem continues a pun on the word "ruined." For, while Melia is ruined spiritually, the poor maiden is ruined in a more physical sense as Melia left her and others "in tatters." She envies Melia her easier life, but Melia tells her that there is a price to pay for such a life,
— "I wish I had feathers, a fine sweeping gown,And a delicate face, and could strut about Town!" —"My dear — a raw country girl, such as you be,Cannot quite expect that. You ain't ruined," said she.