Before discussing Nathaniel Hawthorne, I always like to gesture towards Jane Tompkins's great Sensational Designs, which nicely points out how our notion of Hawthorne's canon status has changed over time. And I like to point that out because I think too many people come out from high school having read (or, let's be honest, having pretended to read) The Scarlet Letter and being turned off to Hawthorne as a heavy, joyless writer. (And again, honestly: how many students get confused about whether Hawthorne was or was not writing in Puritan times? Because I totally did.) But Hawthorne can be joyous and fun; House of Seven Gables isn't just a meditation on time and justice but also a rom-com.
All that said, "The Gray Champion" fits pretty well with the notion of the joyless Hawthorne, as he here goes through a historical event with a bit of fantasy: during the (totally real) rule of Edmund Andros, Hawthorne imagines a near-violent crowd event that is disrupted by a ghostly figure that is the spirit of Puritan resistance. If you're not me, you're probably most interested in the vision of resistance and the issue of church vs. state. (In Hawthorne's retelling, the Puritans resist Andros because he serves the Catholic King James and the Puritans want to keep church and state separate.) This historical event allows Hawthorne to discuss his theory of government, where "any government that does not grow out of the nature of things and the character of the people" is deformed.
If you are me, which is unlikely but not impossible, the two most interesting things are (1) the way Hawthorne uses the "King in the Mountain" trope--e.g., King Arthur is sleeping and will return when we need him most, as is King Barbarossa, Charlemagne, and several others. Here, whenever things get bad for New Englanders, the spirit of the Gray Champion will show up: "I have heard, that whenever the descendants of the Puritans are to show the spirit of their sires, the old man appears again." The crowd of resisters in some ways revives this spirit of resistance, which is marked as both metaphorical and literal, in that the spirit comes from the grave. (There's definitely a connection to be made here with Walt Whitman's "A Boston Ballad," where a parade of republicans calls forth the spirits of old rebellion against monarchy.)
And if you're me, you're also interested in (2) the way that Hawthorne represents a crowd. Almost all of Hawthorne's fictions revolve around or include some pivotal crowd scene. (Try me: name something by Hawthorne and I'll find you the crowd scene or scenes.) For instance, in "My Kinsman, Major Molyneux," a newcomer to town finds his relative being hoisted out by a monstrous and costumed crowd. So here, the crowd both has a single purpose and, sometimes, a single voice--
"Whence did he come? What is his purpose? Who can this old man be?" whispered the wondering crowd.--but is also marked for its diversity, since it includes everyone. Now, Hawthorne isn't as interested in representing the variable crowd as Whitman is--he's usually more interested in the unity of the crowd. After all, they share one spirit in that Gray Champion. But crowds, we can find, are hard things to represent; and especially here where the crowd of Puritan-spirited resisters (with one voice) is opposed by a disunified crowd of the governor and his men, all of whom speak with their own voice. It's how Hawthorne gets to paint one crowd as organic and of the people; and the other crowd as artificial and fragmentary.