What is the significance of the title Cathleen ni Houlihan?

The significance of the title Catherine Ni Houlihan is that it establishes the play as an allegory of Irish nationalism. The title character represents Ireland, deprived of her lands by British colonialists. She requires young Irishmen to avenge the theft of her lands and make a blood sacrifice. This is effectively an exhortation on Yeats's part for Ireland's youth to engage in acts of armed rebellion against the British.

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Yeats didn't invent the character of Catherine ni Houlihan. She had long been a symbol of Irish nationalism and of the aspirations of the Irish people towards independence from the British. Yet Yeats takes the character of this figure from Irish mythology and constructs an elaborate allegorical tale around her.

Catherine visits a family during the 1798 Rebellion, when Irishmen inspired by the ideas of the French Revolution, both Catholic and Protestant, united in an armed uprising against the British colonial authorities. During her visit, Catherine tells the family that her four beautiful green fields—clearly representing the four provinces of the island of Ireland—have been taken away from her. This is an obvious reference to the forced appropriation of Irish land by the British over the course of several centuries.

Cathleen herself, as an old woman, is unable to do anything about this monstrous act of injustice. So she enjoins the young man of the house to make a heroic blood sacrifice in order to regain the lands that have been stolen from her. The young man agrees, providing Yeats's audience with an example of patriotism to which they were expected to aspire.

However, Yeats later wondered whether he hadn't been somewhat irresponsible in inciting young Irishmen to rebel against the British. As he muses in his poem "Man and the Echo":

Did that play of mine send out
Certain men the English shot?

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