The old woman is an informer for the Free State troops. Because she is an informer, she poses a threat to the sniper. Early in the story, an armored vehicle shows up near the sniper's position. It pulls up next to the old woman, and a soldier sticks his head out of the armored car in order to talk to the old woman. The sniper sees the old woman point up toward his position, which means that she knows where he is.
Then round the corner of a side street came an old woman, her head covered by a tattered shawl. She began to talk to the man in the turret of the car. She was pointing to the roof where the sniper lay. An informer.
The sniper, in order to protect his own life, shoots and kills the soldier in the armored car. He quickly follows that shot up by killing the old woman. Unfortunately, in order to shoot both targets, the sniper exposes himself enough to be shot in the arm by the enemy sniper.