Theon has been away for a while so he doesn't recognise his sister who seduces him. It's pretty hilarious because Theon is an enormous dick who deserves a bit of humilation, but that's a pretty weird trick for his sister to play. Poor Theon just wants the townsfolk to recognise him, and respect him, and go to war for him. Instead everyone laughs at him and his dad gives him a few paltry ships to go raping and pillaging with, while his sister Asha gets to command the main fleet and attack a proper castle (Deepwood Motte, wherever that is).
At this point I'm pretty sure that a woman is going to end up on the iron throne, GRRM does like to show us how the sensible strong women can get the better of the idiot crowing men.
