Scarlet Letter - What did the Indians assume at the holiday festivities assume about Hester?

The Indians assumed the scarlet letter marked Hester as an important person..... a person of "high dignity".

Even the Indians were affected by a sort of cold shadow of the white man's curiosity, and, gliding through the crowd, fastened their snake-like black eyes on Hester's bosom; conceiving, perhaps, that the wearer of this brilliantly embroidered badge must needs be a personage of high dignity among her people.