Perhaps the prime example of irony in Shirley Jackson's short story "The Lottery" is that the prize is anything but good; rather, the "winner" ends up dying. The idea that a small town would make such an event an annual tradition shows the depths to which superstition takes humanity. While the premise is not necessarily realistic, it is based on enough truths about human nature to resonate as a powerful tale.
The central plot twist is not the only example of irony in "The Lottery." Another example is the fact that Tessie (who ends up "winning") almost missed the start of the lottery because she was at home washing her dishes. Still another is that, once Tessie's family is identified as the source of the "winner," she asks that her daughter and son-in-law be forced to take part in the fatal drawing, so that everyone takes their fair chance. Knowing that the rules dictate that daughters draw with their husbands' families, she still tries to put her daughter's life at risk. The lottery organizer, Mr. Summers, has an oddly positive disposition (and name), especially given the sort of drawing he has to conduct. Finally, the fact that one resident of this town has survived 77 lotteries -- and remains the town's biggest supporter of the lottery -- is also unexpected.