When Irving's narrator is establishing the setting of the story, it is described as "about the year 1727, just at the time when earthquakes were prevalent in New England, and shook many tall sinners down upon their knees," but Irving does not mean that the area has been experiencing seismic events. Irving is satirically alluding to the Great Awakening, a religious revival movement in Puritan New England that began to gain momentum during this time. The purpose of the Great Awakening was to bring lapsed Christians back to the church. Tom Walker was living through this period and obviously failing to heed the call to return to God's grace.
Another use of satire was more subtle. Washington Irving never openly worked for abolition or said much about it publicly, but in private letters he indicated that he felt that slavery and other forms of extreme social oppression were morally repugnant. Scholars of Irving's work note that he did not want to alienate readers and steered clear of controversy. However, if we analyze his description of the devil, we see that he seems to be satirizing the demonization of African Americans and Indians.
"...the stranger was neither negro nor Indian. It is true, he was dressed in a rude, half Indian garb, and had a red belt or sash swathed round his body, but his face was neither black nor copper color, but swarthy and dingy and begrimed with soot, as if he had been accustomed to toil among fires and forges."
Irving is subtly and carefully pointing out that the devil's complexion is the result of dwelling in the fires of hell rather than an indication of his ethnicity. Irving is satirizing the beliefs of racists at the time who considered slaves and Indians to be demons.
One of the first things that is satirized in the story is marriage. Tom and his wife have a rather turbulent relationship and Irving satirizes this by saying that single people passing by their house were often glad they were not married. He writes,"the lonely wayfarer shrunk within himself at the horrid clamour and clapper clawing; eyed the den of discord askance, and hurried on his way, rejoicing, if a bachelor, in his celibacy."
Once Tom has made his deal with the devil, Irving satirizes his hypocritical actions. He says,"Thus Tom was the universal friend of the needy, and he acted like a "friend in need;" that is to say, he always exacted good pay and good security. "
In addition, Irving satirizes the way Tom turns to religion and became extremely critical of his neighbors, despite the fact that his own soul was damned. Irving says," Tom was as rigid in religious, as in money matters; he was a stern supervisor and censurer of his neighbours, and seemed to think every sin entered up to their account became a credit on his own side of the page. Thus Irving manages to satirize several element of his own society while telling the kind of story many people were already familiar with.