Castlepollard fair was peaceful "until the Peelers were brought out to raise a riot there ... their chief he bade them fire." The "murderers" were sent to jail but freed after "a sham trial"
The context is "The Tithe War": O'Connell's Catholic Association was formed in 1823 to resist the requirement that Irish Catholics pay tithes to the Anglican Church of Ireland. The "war" was passive for most of the period 1823-1836, though there were violent incidents in 1831 (source: _The Irish Tithe War 1831_ at the OnWar.com site)
Zimmermann p. 18: "In the early 1830's a veritable state of insurrection prevailed in Leinster and Munster, when the military and the police were called in to assist in collecting the tithes or seizing and auctioning the cattle or crops of those who refused to pay."
Sir Robert Peel established the Royal Irish Constabulary in 1812 and its success led, in 1829, to the Metropolitan Police Act for London. Originally the term "Peeler" applied to the London constabulary. (source: _Sir Robert "Bobby" Peel (1788-1850)_ at Historic UK site.)
Castlepollard is in County Westmeath, about 50 miles northwest of Dublin. - BS
There was certainly a tendency for police to fire on crowds in Ireland. But I checked six histories without finding an account of this particular tragedy, at least under this title. One suspects more was going on than the song reveals. - RBW