Yes, in many areas, you do need a license to hunt wildlife. What consititutes wildlife is another matter and what constitutes hunting is another matter.
The thread title is probably misleading and misrepresentational of the actual charges, sort of like when folks post that a person was arrested for self defense and you figure out from the story that the person was not arrested for self defense, but through a matter of self defense it became known that said person defended himself with a weapon he could not legally possess (such as by not have it registered in New York or because the person was a felon) or because the weapon was illegal itself. Maybe the uncle made the neighbor mad because he was shootiing squirril across a property line, shooting critters that were in the neighbor's yard, not his own. So maybe it was hunting across a property linee without permission or that the neighbor felt endangered by the cross property shooting into his yard. Endangerment by shooting across a property line is a violatoin of Sec. 38-129, Air Guns, in Denver, at least if done by a minor.
In Colorado, Alberts, Fox, and Pine squirrels have a season and require permits and have limits.
It could be that said uncle was shooting some protected species.
I am certain that the charge and subsequent jail time is not for "shooting squirril."