Rip Van Winkle sleeps for twenty years in imitation of the old German legend of "Peter Klaus," upon which it is based; also, his somnolence for these two decades allows him to sleep through the American Revolution and a few years afterward. Thus, he awakens to an entirely new country that he does not recognize. His lack of recognition is imitative of Irving's nostalgia for the Romanticism of an earlier age.
Washington Irving's story has a larger than folklorist meaning as Rip Van Winkle's "enchanted sleep" of twenty years is, as literary scholar Charles Neider writes,
...a fairy tale of bewitchment and a story of the magical changes wrought by Time.
While he is young and wanders off, the Kaatskill Mountains area is part of the thirteen original colonies with King George III of England as ruler. After Rip awakens and returns to town, he sees a sign over the tavern that reads, "George Washington" and he is absolutely baffled because he has slept through the entire Revolutionary War. Now, instead of the leisurely manner of those who sat on the benches of the old inn and the conviviality he shared with them, Rip does not recognize the crowd of "busy, bustling disputatious" people, who now disturb the old tranquility.
With the passages in which Rip Van Winkle is astounded by the changes in the character of the people and the appearance of the inn, Irving expresses his Romantic tendency to return to the past. Indeed, his nostalgia for the "drowsy tranquility" of a previous age is apparent in the narrative's end as Irving appears to value Rip's rustic innocence and kindness more than the wordliness of the new Americans.