I've heard a couple of different theories as to what it's based on.

One is that there was a particular battle (the theorist couldn't remember the name) where there actually were just forty Irishmen against a thousand Englishmen. Apparently, the night-time surprise attack was successful.

Another theory is that a lot of Irishmen immigrated right around the time of the War Between the States, and were swept up on either side of the conflict, and the song is told from their perspective (thus the reference to "someone else's bloody war" and the longing to go home to Ireland).

Similarly, some people believe that the song is referring to the thousands of Irishmen involved in WWI.

I'm not sure which hypothesis is true -- or if Brooks even had an actual battle in mind when he was writing the song.