why is daniels mistake so disastrous for the villagers? why do they blame Mr.Watts

When the redskins came they came with a simple request to have everyone put down their names, while they were doing so a soldier saw the name "PIP" scribbled down on the sand. The redskins demanded to know who PIP was and Daniel spoke out, telling them that "Pip belongs to Mr. Dickens" (P. 97) He pointed him to Mr. Watts' house, and Mr. Watts took the identity of Mr. Dickens. The reason that Daniels' mistake is disastrous is because he could have said that PIP was a fictional character, instead he pointed them to Mr. Watts. Of course, Mr. Watts wasn't Mr. Dickens and couldn't prove that PIP was fictional because the book wasn't on his desk so the redskins decided to burn down the villagers' possessions. In my opinion, some blamed Mr. Watts because they didn't understand why he didn't bring forth PIP, and others blamed him for bring PIP and the book into their lives. I believe that there is a simpler answer in the book however, I could not find it at this time. Mind you, all this could have been prevented had Dolores not hid the book.