Situational irony is used throughout the story, beginning with the story's title. The idea of a lottery conjures up ideas of rewards and prizes, certainly not stoning. The ending, though, thoroughly foreshadowed, comes as a shocking and ironic surprise.
The fact that Mrs. Hutchinson can treat the lottery so lightly contributes to the irony of the story. She comes late to the lottery because she forgot all about it. She is fully accepting of this barbaric tradition until she is the one chosen to be stoned. When she is chosen, she begins to yell that the process is unfair. So, for her the lottery is also ironic. Something that she thought unimportant becomes fatal for her.
Also contributing to the irony and horror of the lottery is the way it is conducted. A brutal murder is conducted, but it is part of an annual ritual that is done by law-abiding citizens and their families. The setting is a small town in the USA and the gathering seems to more like that of a July 4th celebration than a sacrificial stoning.