South Ossetia is an analyst's or commentator's minefield. About 10 people in the world outside of Georgia or Russia really understand it. Abkhazia is sexy — S.O. was the ugly stepsister.This is the second time I have heard about the Russians providing Russian passports to residents of South Ossetia. (I can't find the first one.)But it appears that Russia was annexing South Ossetia anyway, even as the South Ossetian government claimed to be an independent government.
The South Ossetian forces (under Russian command) hit Georgian villages in So. Ossetia, and the Georgian army responded. It had been going on for a few days/weeks/years, depending on how you look at it.
Administratively (at least until last week), South Ossetia was a patchwork quilt of Tskhinvali-, Georgian-, and Georgian-backed-proxy-Ossetian-controlled villages. The peacekeepers are a four-party (Georgia, Russia, South O, North O) operation, under an OSCE mandate. It's hard to tell the difference between Russian "peacekeepers," Russian Army, and So. Ossetian army. The Tskhinvali security forces are largely regular Russian Army (not mercenaries), wearing S.O. uniforms.
And it only gets more complicated. Many yakkers refer to the S. Ossetians as "ethnic Russians." They're not; they are Ossetians (an Iranic ethnos), Georgians, and mixed families. The residents of Tskhinvali-controlled S.O. have been given Russian passports, and most call Putin "our president." Russia has de facto annexed S.O., while Tskhinvali maintains that it's independent.
The map of Georgia shows South Ossetia (in green) as almost at the center of Georgia. For Russia to control South Ossetia would mean that Geographically Georgia has indefensible borders. It would (will?)severely limit Georgia as an independent nation. This has to be at least part of the calculation going on the the minds of the leadership of both Georgia and of Russia.