I'm not an Irish musician but I play Irish music. Apart from the meaning of a quadrille-like group dance, set dance can refer to a fixed set of steps in step-dancing such as Jockey to the Fair, the Job of Journeywork. Some of the tunes for these dances depart from the standard rhythms and may have extra parts or extra notes (Jockey to the Fair is an example). I don't know if there was ever a set dance to Tom Tully but this is why the tune would have been categorised as a set dance.