Banner The Anglo-Irish Treaty gave South Ireland, or the Irish Free State, more independence than the Third Home Rule Bill. This treaty however divided the Dáil Éireann and the Irish Republican Army and a Civil War was inevitable.  
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Anglo-Irish Treaty

On 11 July 1921 a truth was signed between the British and Michael Collins. On 6 December 1921 the British and the Irish delegation, made up of Michael Collins, Arthur Griffith and Robert Barton, agreed on the Anglo-Irish Treaty.

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Irish Free State

Arthur Griffith

Arthur Griffith.
(source: Irish Stamps)

The Anglo-Irish Treaty would replace the Third Home Rule Bill and the Ireland Act and would result in a much more independent South Ireland, or Irish Free State as the new country was called.
The Irish Free State, or in Gaelic Saorstát Éireann, was for example permitted to have his own army. In return Britain would have a representative and some naval bases in Ireland. The Anglo-Irish Treaty still included an oath of allegiance to the English monarch as Head of State.
The Anglo-Ireland Treaty also provided in a commission to fine-tune the boundaries and Eamonn de Valera, the Sinn Féin leader, would become the first Prime Minister of the Irish Free State.

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Dáil Éireann Divided

The Anglo-Irish Treaty divided the Dáil Éireann.
The pro-Treaty side suggested that the terms were the best possible Michael Collins and Arthur Griffith could have obtained (the Irish Free State would have a similar political status as modern Canada): We have brought back the flag, we have brought back the evacuation of Ireland after 700 years of British troops and the formation of an Irish army. (Arthur Griffith).

Eamonn de Valera however was furious because the Anglo-Irish Treaty was signed without consulting the Dáil Éireann and because it did not resulted in an united independent Ireland for which the Republicans had died for in the Easter Rising. The song A Song of the Loyal Irish provides a cynical look on this neither free nor united Irish Free State, while the song The Irish Free State is a mere slyly dig.

The anti-Treaty side considered Michael Collins as a traitor. The song The Big Fellah, which was the nickname for Michael Collins, reflects this opinion.
The Dáil Éireann voted on the Anglo-Irish Treaty on 7 January 1922 and it was accepted by the majority of 64 in favour and 57 against. Eamonn de Valera resigned as President of the Dáil Éireann and was replaced by Arthur Griffith.
The division of the Dáil Éireann, and therewith of the Irish Republican Army (IRA), reflected the opinion of the Irish population and the seeds for a Civil War were sowed.

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