The story is set during the Franco-Prussian War of 1870–1871, when the Germans occupied a large part of France.
People in Alsace, where the story is set in Alsatia, mainly speak the Alsatian dialect, which belongs to the Germanic branch (like German), not to the Romance branch (like French) of the Indo-European languages. The names of the charactes are also predominantly German, not French: Frantz, Wachter, Hauser and Rippert. Hamel is a French name, but even the Old French noun hamel has a Frankish and therefore Germanic root.
Alsace has long been a bone of contention between France and Germany, but since 1639 (by military force) or 1648 (by treaty) Alsace had been part of France. As the story shows, in the 230 years that had passed by the beginning of the Franco-Prussian War, the Alsatians had begun to feel French, not German. The story illustrates the (French) patriotism that several characters feel when confronted with the consequences of the German occupation. (As a consequence of the war, France ceded more than 90% of Alsace to Germany; the region remained German until the First World War.)
From the point of view of the blacksmith Wachter (not "watcher"), a school that teaches German instead of French does not represent the culture he (and several generations of his ancestors) grew up with, so there is no need hurry towards school. Of course, he cannot know what Mr. Hamel is up to during his final day as a teacher.
The presence of Hauser and the other adults in the classroom (including a former mayor) reinforces the idea that the Prussian decision regarding teaching in German does not only concern the school children and their teacher but also the adults. It signals that the entire society resents this measure. The symbolism of the three-cornered hat or tricorne is less obvious: it had once been widespread in France, both among civilians and as military wear, but by 1870 the folk song My Hat, It Has Three Corners was also popular in Germany. If Daudet was aware of this, this would subvert Hauser's wearing it as a symbol of French patriotism (assuming that this was his intent in the first place).
Frantz's dismal thought "Est-ce qu'on ne va pas les obliger à chanter en allemand, eux aussi?" widens the scope of the German occupation from humans to nature. Frantz fears that even the animal world cannot escape the consequences of the Prussian occupation, which stresses his unease about the occupation and makes it even more unpalatable to the reader. It is no coincidence that the trumpets of the Prussians interrupt the Angelus, a catholic rite, thereby highlighting a religious opposition between the predominantly Catholic French and the predominantly Protestant Germans.