With the situation as it was during 1940 and 1941 with Irish people and their leaders fearful of attack from both sides, many theories and stories sprung up at the time and after as to why bombs were dropped on Neutral Ireland. Notwithstanding the first two suggestions below, the most likely explanation is that the bombs were dropped by German bombers whose crews found themselves lost over Ireland having gone astray while on course to bomb England.
Among some circles in Ireland, as would be expected, there was the belief that the weaphons were dropped from British aircraft in an attempt to dupe the Irish Government into declaring war on Germany. To explain the reports that the dropped weaphons were of German origin, there is the suggestion that they were captured German ordnance, dropped from British aircraft, or more fancifully, that the bombs came from German aircraft 'reconstructed' by British forces.
It is not beyond the bounds of belief that Britain might, in a time of great peril such as they faced in 1940 and 1941, go so far as to try to force ireland into the war by carrying out a raid of this kind. i would dispel at first the possibility of 'reconstructed' aircraft being flown by british crews for some technical reasons. The night sky of 1941 would not be the safest for a British crew of a captured German bomber. The risks of having the crew come down in Ireland with live weaphons would be detremental to Britain in the eyes of the world.
There is also, as discussed briefly below, the idea that British scientists were able to "bend" the German radio direction beams to lead the bombers onto other targets.
There was of course the public admissions during 1941 by the German authorities that the bombs came from their aircraft!
Another theory is that the attacks were deliberate German action designed to force Ireland into the war on Britains side (thus giving the Germany good reason to invade) or as a timely reminder to Ireland to remain properly neutral. One reason given for the tragic May 1941 attack on Dublin was that a raid was launched to 'punish' the Dublin government for sending fire tenders across the border to assist fighting fires caused by the German bombing of Belfast.
One researcher, Leo Sheridan, was reported in the national media in December 1998 that the May 1941 raid on Dublin was indeed deliberate. His reported findings in the records of a German Army base, claimed that the raid was designed to deliver a message to the Irish Government. It was claimed that the Irish President, Douglas Hyde, was targeted due to his being protestant and therefore the assumption was that he would have greater pro-british sympathies. Sheridan went on to say that the German Dornier Do17 aircraft was hit by Irish flak and hit, that the crew then signalled a U-Boat crew but never returned to their base. it was then claimed that an RAF pilot claimed to have shot down the aircraft.
The year previous, 15 October 1997, a Luftwaffe veteran in an interview on the RTE Gay Byrne radio show, claimed he was a member of the crew that bombed Dublin in May 1941. The man remained anonymous and appeared to be very secretive of the mission. He did however give the reasons for the attack as poor weather conditions and errors in their radio guidance system.
At this stage of the war, despite their radio assistance aids, it could still be difficult for a bomber German Bomber crew to find their way to their assigned target. For example, on the night of April 7th and 8th 1941, a number of German aircraft dropped bombs on Belfast. The targets for that night had included Liverpool and the Clyde. However, due to inaccurate weather predictions, visual way points in England could not be found and having flown out of range of the radio directors, certain crews made the decision to attack Belfast. This is presented as an example of how a crew could find it self over Ireland, out of range of direction equipment, with Britain covered in cloud and a load of bombs which they did not wish to carry back to France or the Low Countries. A number of the bombing incidents in Ireland occurred in rural areas, which were likely to be crews dumping their bomb loads prior to the hazardous flights back to their bases. No doubt at night, in 1941, rural Ireland looked much like rural England. The Irish Army look out posts regularly plotted the paths of "unknown" aircraft across the east coast and the midlands as aircraft swept up the Irish Sea on their way to bomb Western Britain, Scotland or Belfast.