James was probably born about 1600,[1][2] at Kilfaughny, near Athlone, County Westmeath, youngest son of Theobald Dillon and his wife Eleanor Tuite.
Dillon is alleged to have conspired with Connor Maguire, 2nd Baron of Enniskillen before the rebellion; he proposed seizing Dublin Castle but according to some accounts, the Earl of Ormonde, commander-in-chief, talked him out of it.
Dillon is recorded as a dove within the confederacy - favouring a speedy reconciliation with Charles I of England and Irish Catholic participation in the English Civil War on the royalist side.
The question of whether to do this, or whether to achieve Catholic aims in Ireland by military force, against all the English factions, was a source of major division among the Confederates.
In January 1643, at Rathconnell near Mullingar, Dillon attacked a second relief force as it returned to Dublin with the remnants of Ranelagh's garrison.