Is this a shorthand for the EU, or is Duo just teaching us the word on its own?
Since it’s given as An tAontas rather than An t-aontas, its translation should be “The Union” rather than “The union”. I’d think that something like an tAE would be the Irish analogue for “the EU” (but I’m not sure about how articled initialisms are treated in Irish). As a US citizen, I’d tend to think of “The Union” as one of the belligerents in the 1861–1865 war.
EDIT: The translation above has been updated to read “The Union”.
Northern Ireland unionists often refer to the Union, i.e. the United Kingdom of Great Britain and Northern Ireland.
Why the capital letter is the second letter in the word and it isn't first?
A masculine noun in the nominative/accusative case (singular) that starts with a vowel is prefixed by "t" when it follows the definite article "an" and the "t" is not capitalised.
e.g. an t-asal, an t-aontas
an aisling, an iris as they are feminine nouns.
It's a proper noun, and the word is eclipsed. I guess when that happens the original first letter stays capital instead of changing the capital to the letter used for eclipses.
The initial T in tAontas isn’t an example of eclipsis; it’s an example of T-prothesis.
The same behavior happens with H-prothesis, e.g. Dé hAoine (“(on) Friday”).