Place a large Dutch oven over medium heat and lay the bacon slices flat to slowly cook until their fat renders and the edges turn golden. Remove the bacon to drain on paper towels, then chop and set aside.
Keep just two tablespoons of the bacon fat in the pan and raise the heat to medium-high. In batches, sear the lamb pieces until each side is beautifully browned without stirring too often to ensure a good crust.
Layer the browned lamb at the bottom of the pot, then add a layer of potatoes, onions, turnips, carrots, and sprinkle chopped bacon on top. Repeat with another lamb layer followed by the remaining vegetables. Stir in the pearl barley, thyme, salt, and black pepper evenly over the layers.
Pour the warmed water or lamb stock over everything and bring to a gentle boil. Lower the heat to a very light simmer, cover the pot partially with the lid, and cook for 1 1/2 to 2 hours until the lamb is tender and starts to fall off the bones.
Skim off any fat that rises to the surface. Carefully pick out the bones using tongs, then season the stew with additional salt and pepper to taste before serving.
