In the late 18th century Co Armagh was the most densely populated rural area in Ireland. Here the linen industry flourished and competition to rent land became fierce near the market towns, bleach greens and the water-powered wash mills, dye works and beetling mills.

Few Catholics were drapers but many were handloom weavers competing with their Protestant neighbours. Trade rivalry easily became sectarian rivalry. Rents for the tiny farms here were the highest in Ireland and Protestants, living on oatmeal and perhaps bacon once a week, often felt that Catholics, able to survive on potatoes and buttermilk, could unfairly outbid them by paying higher rents.

According to John Mitchel the Irish Political Journalist, their members were all Protestants. Their grievances he writes were connected with landlord oppression and clerical exaction, in addition to alleged injustice of employers in manufacturing labour. The latter disturbances however were soon over, because he says, the grievances were not so deep-seated because the two sides being mainly of the same race and religion the enmity and exasperation was never so fierce.

However, Richard R. Madden suggests that the Peep-of-Day Boys were composed of both Protestants and Presbyterians while the Defenders originally consisted of Catholics. The Peep-of-Day Boys so-called on account of the nature of their attacks between dusk and dawn on the homes of their Catholic neighbours in search of arms. The title "Defenders" arose on account of the resistance of Catholics to these aggressions. From the search for arms the "privileged party" proceeded then to more general acts of plunder and outrage, perpetrated on most occasions with the most "scandalous impunity."

Drunken affrays in the vicinity of Markethill, between gangs of weavers calling themselves the Nappach Fleet, the Bawn Fleet and the Bunkerhill Defenders, had become openly sectarian by 1786. The combatants regrouped, Protestants becoming ‘Peep o’ Day Boys’ and Catholics ‘Defenders’. For the next 10 years and more sectarian warfare raged in Co Armagh. Better armed, the Peep o’ Day Boys at first swept all before them.

These were described by a local landlord, the Earl of Gosford, as

'a low set of fellows…who with Guns and Bayonets, and Other weapons Break Open the Houses of the Roman Catholics, and as I am informed treat many of them with Cruelty.'

According to John Byrne, a Catholic dyer from Armagh city, some Protestant gentlemen lent arms to Catholics 'to protect themselves from depredations of these fanatick madmen; and many poor creatures were obliged to abandon their houses at night, and sleep in turf-bogs, in little huts made of sods; so great was the zeal of our holy crusados this year.'

In November 1788, when a Catholic mob near Blackwatertown taunted the Benburb Volunteers for marching to ‘The Protestant Boys’ and ‘The Boyne Water’, it was fired on. Five were killed. The following July more lives were lost when Volunteers made a successful assault on Defenders assembled on Lisnaglade Fort near Tandragee.

'For heaven’s sake dont forget the Powder & Ball with all Expedition,' the Drumbanagher magistrate John Moore wrote to Lord Charlemont in July 1789. He had no hesitation in giving out arms to ‘the Protestant Boys that have none’ because Defenders 'are now beginning their Night Depredations and Lye in Wait behind Ditches, to murder and Destroy Every protestant that appears.'

The sectarian violence fanned out to the uplands of south Armagh. Here the Catholics – still speaking Gaelic and wearing mantles – had the advantage of numbers and turned on the Protestants with a ferocity not seen for more than a century.

In September 1795, Defenders assembled near Loughgall at a crossroads known as The Diamond to face the Peep o’ Day Boys in battle. When the Protestants were reinforced by a Co Down contingent called the Bleary Boys, the Defenders took their priest’s advice and agreed to a truce.

Both sides withdrew but on 21st September a fresh body of Defenders arrived from Co Tyrone, determined to fight. The Peep o’ Day Boys, on home ground, quickly reassembled and took position on the brow of a hill overlooking The Diamond. William Blacker, a Trinity College student home on vacation, spent his time melting lead from the roof of Castle Blacker, making bullets for the Peep o’ Day Boys.

Then, he tells us, the Protestants opened fire 'with cool and steady aim at the swarms of Defenders, who were in a manner cooped up in the valley and presented an excellent mark for their shots. The affair was of brief duration…from the bodies found afterwards by the reapers in the cornfields, I am inclined to think that not less than thirty lost their lives.' The victorious Protestants then marched into Loughgall and there, in the house of James Sloan, the Orange Order was founded.

Through the efforts and exertions of both the Protestant and Presbyterian brethren who came forward to protest against the continuance of the disabilities under which the Catholic community laboured “throughout ages of injustice and unexampled oppression” brought about some redress between 1794 and 1795. Under the influence of the United Irishmen according to T. A. Jackson, political unity was replacing sectarian divisions in Ulster. This he says inspired "public-spirited zeal" in Catholic areas like County Armagh were the population had been evenly divided and the scene of sporadic violence between the Peep O'Day Boys and Catholic Defenders for years dying down to nothing under the influence of the United Irish. Henry Joy McCracken while attempting to unite the Peep O'Day Boys and Catholic Defenders was placed under surveillance and was later arrested in October, 1796, and sent to Dublin, being placed first in Newgate prison, and afterwards to Kilmainham Jail.

Throughout the 1790s up to 7,000 Catholics were expelled from their homes in central Ulster. According to Edward Hay, the object of these Orangemen appears to have been, "not to suffer a Catholic to remain within the limits of their sphere of action." They posted on the doors of the Catholics he says, peremptory notices of departure; specifying the precise time, a week at the farthest, pretty nearly in the following words: "To hell or to Connaught with you, you bloody Papists! and if you are not gone by (mentioning the day) we will come and destroy yourselves and your properties. We all hate the Papists here." They were he concludes, generally as good as their words. Former Grand Master of the Orange Order William Blacker, says he deplored these events but has suggested that no known wrecker or Peep of Day Boy was ever admitted to the Orange Institution. Mervyn Jess however notes that some Peep of Day Boys might have “slipped through the net” but if so they found themselves in a vastly different organisation.