The Irish Free State was the result of an anarchic mess of freebooters, adventurers, and rebels taking over the Irish government following the overthrow of the Irish Monarchy during the First Irish Civil War.
Free State forces were prized for their intimate knowledge of firearms and explosives, the adoption of which had practically won them the war against the antiquated Knights of the Harp that formed the core of the Crown's forces. For about two generations, until the conquest of Ireland by the newly unified Aeldrum, the Irish fielded the most reliable and technologically advanced mercenaries in the cosmos.
Rebellion has always been in the blood of the Irish, whether against the Crown, or against the later Aeldman occupation. The Free State was the result of the wild elements of the rebels taking control of the government and instituting a short lived Libertarian utopia. The Free State's economy was primarily driven by the export of hardy Irish mercenaries through the Free State Army, and the highest officers of said army became the regional governors. These governors then used the revenues of their personal regiments to fund works in their districts or (more likely) enrich themselves.
When Aeldrum did, at last, invade, it did not take long for the Free State to collapse under the pressure of all out war. It did not have the control over its populace to mobilize for a large conflict, and did not have time to recall its many mercenaries to defend its borders.
Later rebel groups against Aeldman occupation would take up the mantle and organization of the Free State Army, continuing to evolve it through the generations. In a curious twist, by the time of the Irish War of Independence the FSA actually contained some Royalist elements among the borderers. The Free State Army was officially dissolved in favor of the Irish Republican Army by the re-established Dail after the war.