Dublin in 1904 was a bustling city, with all kinds of shops and commerce which brought the goods of the world to its doors. And yet, at the same time, it was home to some of the darkest and dingiest slums of its day, corridors of hopelessness from which many never fully emerged. Joyce himself had travelled through at least two of its social classes, thanks to the wavering fortunes of his father; he'd enjoyed both a middle-class home and a semi-private education at Clongowes Wood Academy, and far poorer quarters along with the cold water and thrashings at the O'Connell School operated by the Christian Brothers. The Jesuits were intellectual in bent, and Joyce much preferred them; the loss of his place there and return to dismal life in Dublin were hard on him.
But the change did Joyce a favor; having been dislocated from his class and his comrades, he experienced a crisis of faith with his religion, and was thus better prepared than most to see Ireland in a multi-dimensional way, and to be drawn into the European modernist movement. Unlike other writers of his generation, he never gravitated to the nationalism of the Young Ireland movement and its successors, and had nothing but disdain for the attempt at the revival of Irish Gaelic literature and culture (at one point in "The Dead," the main character pointedly objects to the notion that Irish is "his" language). One can readily imagine Joyce, his eyesight poor and always growing poorer, peering through thick-lensed spectacles at the plight of the people about him, whose lives were strictly circumscribed by poverty, strict Catholic morality, and the consciousness that Ireland was a subjugated nation, claimed by the English and with her harps on its flag.
There is nothing supernatural in these stories -- only the extreme inner consciousness of loss, of the fragility of beauty, of the fleeting nature of life's few pleasures. In Araby, we follow a desperately shy and isolated young man through his day, and into the night on a trolley in a doomed attempt to find a fitting gift for the girl he loves but can barely speak with. In Clay, we play a little game -- a game about destiny, family, and (yes) death. And in The Dead, we come full circle, looking within and without the walls of polite Dublin society, and witness the emergence of a newly urgent sense of identity that, though certainly Irish, rejects the cultural conventions of "Irishness."