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What a wonderful book, The Hangman's Daughter, by Oliver Pötzsch, is!
The reason that the element of witchcraft is so important in this novel is because the fear associated with witchcraft allows crimes (specifically murders) to occur, and the blame can be shifted with the subtle (and not so subtle) clues—such as the "tattoos" (that at first no one recognizes as tattoos)—left behind that strike terror in the hearts of the village folk. This is done by simply inferring that witchcraft is being practiced among them. The fear that people are not what they seem feeds the growing frenzy regarding practices of the occult. (There is good reason for this as the real danger rests with respected members of the community.) The memory that witches were burned in this area only seventy years before simply generates more unrest: people in Schongau (in Bavaria) believed then, and many still do as the novel begins. While some more conservative members of the village "elders" wish to avoid a mistaken assumption that the devil's work is being carried out, others are all too quick to use the chaos to their own ends, even if the innocent die.
Ironically, it is the hangman, Jakob Kuisl (who himself is feared and something of an outcast), and a young "university-educated" doctor, Simon Fronwieser, who are level-headed enough to search for clues to find why the children of the town are being killed. Their investigation turns up some interesting "players" in the plot taking place behind the scenes in this town, and ultimately saves the life a woman (the town's midwife) who cared for these "marginal" kids (who were all actually one-time orphans of some kind) and now stands accused of witchcraft because of her association with the children, and her healing practices.
It is interesting to note that while people in the U.S. often think of witch trials in taking place in England, France and New England (specifically in Massachusetts, in the U.S.), this story takes place in Bavaria, showing how far-reaching the fear of witches spread in the past.