They decided that the hedgehog was a wise animal, and if it saw its shadow (meaning, a sunny day) on the midway point of winter, that it would hurry underground and brace for another 6 weeks of winter. And, of course, if it didn't see it's shadow, that meant an early spring.
When the settlers arrived in Pennsylvania, they found that the common groundhog resembled the European hedgehog, and the rest, as they say, is history.
The German tradition actually stemmed from an even older English tradition of "Candlemas Day", set 40 days after Christmas.
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