After the Irish War of Independence, the Anglo-Irish treaty gave 26 of the 32 Irish counties the right to form a free state. The 6 northern counties seceded from the Free State. The British also maintained ports along the Irish coast in Cobh, Bearhaven and Lough Swilly. Some of the IRA (Irish Republican Army) independence fighters were not at all happy with the provisions of the treaty. The Irish Civil War was a result of this dissatisfaction; disgruntled IRA soldiers fought Free-Staters for pre-eminence in further negotiations with the British.
In the story, the sniper first spies the old woman when she speaks to the machine gunner in the armored car. It turns out that she is an informer; as she points in his direction, the sniper realizes that she is giving his position away. He shoots the gunner and then the old woman. The old woman sets up a conflict for the sniper because she is Irish as well; in the Irish Civil War, Irishmen fought each other, informed on each other, and suffered the miseries of prolonged warfare as a people. The miserable conditions of war brought death and poverty on the people. The author describes the old woman's tattered shawl, a symbol of her poverty.
Because of the civil war, the sniper has no choice but to shoot an old woman he would otherwise have treated as his own grandmother in better days. This conflict between loyalty and self-preservation presented many agonizing choices for those who fought.