http://www.citizensinformation.ie/en/mo ... scent.html
In the above link there is information that
Citizenship through descent from Irish grandparents
If one of your grandparents is an Irish citizen but none of your parents was born in Ireland, you may become an Irish citizen. You will need to have your birth registered in the Foreign Births Register.
If you are entitled to register, your Irish citizenship is effective from the date of registration. The Irish citizenship of successive generations may be maintained in this way by each generation ensuring their registration in the Foreign Births Register before the birth of the next generation.
Since 1 July 1986, a person registered in the Foreign Births Entry Book after 1986 is deemed to be an Irish citizen only from the date of his/her entry in the Register and not from the date of birth. This means that children born to that person before his/her date of entry in the Register are not entitled to citizenship.
People registered before July 1986 are deemed Irish citizens either from the date the original Irish Nationality and Citizenship Act came into force, that is, 17 July 1956, or their date of birth, whichever is later. Only children born after 17 July 1956 can claim citizenship in such cases.
So, your wife needs to register her birth in Foreign Birth Register. Check out the below link on how to do this.
http://www.dfa.ie/home/index.aspx?id=88049
If you wife has documentary proof, as I mentioned above, then it seems like a fairly simple process.
