It's "piccolo" not piccolio - italian word meaning "small".I played with John Doonan's band a few times - he used a standard simple-system instrument,like the original poster seems to have,which shares fingering with tin whistle.New instruments today are boehm system,which is different.Its NOT the same as a fife - which usually transposes into key of F, though it looks similar,its slightly bigger.There's nothing irish about it - and its rarely used by traditional irish musicians, but in the right hands it can sound great on irish dance music.A really good wooden simple-system piccolo is very hard to find these days though.
John Doonan had very much his own style and could get a beautiful tone out of the piccolo - which is quite a challenge, because it can easily sound shrill, and a bit ear-shattering.I used to play piccolo a lot myself - but could never get John's sweet tone.I think his son Mick can though.Another good player was Sean 0'Rourke(I think) who was in a scottish band in the 70s,whose name escapes me.