According to the Oxford English Dictionary "roo" is a verb from the Orkney and Shetland
dialect (which matches the "Scottish derivative" part of the song's title). The full OED definition
is given below:
trans. To strip (sheep) of wool by hand; to pluck (wool) in this manner.
1612 [see rooing vbl. n. below].
1615 Acts Lawting Sheriff Orkney (Maitland Cl.) 175 It is statut and ordanit that it
sall nocht be lesum to no maner of persone nor persones to rowing [sic] ony scheip unto the
tyme they be lawfullie warnit.
1629 Ibid. 205 That nane tak..nor row sheip on Sonday.
a1733 Shetland Acts 8 in Proc. Soc. Ant. Scotl. XXVI. (1892) 198 That none
mark lambs or row sheep..but at the sight of sufficient witnesses.
1809 A. EDMONSTON Zetland II. 211 About the middle of May, when the fleece begins to loosen
spontaneously, it is pulled off with the hand; this operation is called rooing the sheep.
1856 E. EDMONDSTON Sk. & Tales Shetland xiv. 175 The wool is never shorn, but
rooed, that is, pulled with the fingers from the creature's back, lock by lock.
Hence 'rooing vbl. n. Also attrib.
1612 Acts Lawting Sheriff Orkney (Maitland Cl.) 160 Act for Thift, Rowing and pulling of Scheip.
1807 J. HALL in Bulwark (1905) June 140/2 Nor does this operation, here called 'rooing',
seem to give the animal the smallest pain, if performed at the proper season.
1822 HIBBERT Descr. Shetl. Isl. 439 At the same time the general rueing begins.
1883 R. M. FERGUSSON Rambles xvi. 104 It is the rooing day, when sheep are shorn.