How does one fight communist terrorists on territory under one’s control at the time? There aren’t always easy answers.
Before 1916, what the Irish wanted was home rule, which is what Northern Ireland has with the Stormont parliament and Scotland has with its own parliament; this is even the form of rule Canada has. The Free State was also that manner of rule.
When the US wanted to control communism within this country, it did; now they are in the government.
The “native” Irish themselves wanted nothing short of independence; the transplanted Protestants from the island of Britain (a small minority) wanted “home rule” within the UK. In the end, England could only hang onto the part where the transplants were a majority (the north), and even that balance was later upset by the native birthrate. The Protestants are an alien presence on the island; it isn’t their only colony in Europe (see Gibraltar).