Shady Sands was the capital of the New California Republic before it was the victim of an attack.
Lucy and the dwellers of Vault 32 and 33 were taught that their goal is to survive until “reclamation day” when they head out to the surface and repopulate.
When she talks about the bombs dropping, she is referring to the original ones in 2077. However, Maximus mentions that the bombs dropped when he was just a child.
Then they reach the ruins of Shady Sands, and Lucy is surprised to find out that humans tried to populate the surface already.
Maximus reveals that he was from Shady Sands and he was the only one from his family who survived before he was taken in by the Brotherhood.
Erase the competition
Lucy learns more about the formation of Shady Sands and the New California Republic from the classroom in Vault 4, and then later discovers the truth from Moldaver.
Moldaver says that Lucy’s mother discovered signs of life on the surface but when Hank tried to shut her down, she sought out these people.
She found Moldaver, a socialist in the pre-war times who was instrumental in the formation of the New California Republic and moved there with Lucy.
Hank worked for Vault-Tec and they planned to have the dwellers stay in the vaults for eternity so when the NCR propped up, it was a threat to their control.
He tried to convince Lucy’s mother to return with him, but she refused. So he took Lucy with him and had bombs dropped on Shady Sands to snuff out the NCR altogether.
Many of the survivors moved to Vault 4 and Moldaver formed a small colony at the observatory to keep the NCR alive and fight back against Vault-Tec and the Enclave.
Also Read: Vault 4 in Fallout (2024) explained