In response to stone's post, I do agree that Irish rebels often resorted to brutal tactics like their British counterparts, and often against their own people. However, I think you are too quick to excuse the British from the harsh actions taken against innocent Irish civilians as a result of Irish rebellions. You have to keep in mind that Irish rebellion did not just arise in the early 20th century, and the British actions in the movie were not just a result of the Easter rising of 1916. Brutal British rule over Ireland dates back several hundred years, and the Irish fought for freedom dating back to the arrival of the tyrant Oliver Cromwell in the 1600s. For example, the British forces would enter villages, line the Irish people along the edge of a cliff, and push them off one by one-- and these were not hostile villages. The Irish rebels resorted to actions like any group of people in history whose freedoms have been threatened or limited.
You also have to take into account current Irish sentiment about the IRA, particularly the IRA that continued past the 1930's. Most consider the Irish rebels portrayed in the movie to be the "Old IRA", whereas the "IRA" that continued violent attacks throughout the remainder of the 20th century and into the 21st century to be a type of "New IRA", and not a true continuation of the rebels we see in the movie. The goals of these two factions of the IRA are very different.
I would agree with you only to the extent that I believe the movie is less concerned about depicting a collective look at the Irish rebellion and all of the complexities involved, and it is instead focused more on the human cost of war. For example, there were numerous political factions at the time, more than just the rebels and the Free-State supporters. The political environment was extremely complex, and it was different in throughout the many counties of Ireland. In the movie, we only see the state of Ireland in County Cork through the eyes of the Irish rebels. While the movie does seem to sympathize with the Irish rebels, we get a sense of both the violence of the British toward the Irish, as well as a clear look at the Irish rebels' hostile action toward their own people.
Overall, I think the movie is a powerful look at the inner turmoil people face when their freedoms and way of life are threatened. Damien's decision to oppose the treaty was not a simple decision. He was beginning a new life with Sinead, and he had to choose between a somewhat normal life with a continued eminent threat of losing his freedom (with British forces still very much in control), and a chance to pursue absolute freedom from British rule.