The reason why the picture of King George over the village inn has been replaced by a picture of George Washington is because the new owner of the village inn is General Washington.
The changes made in over the village inn are as follows:
The red coat was changed for one of blue and buff.
A sword was stuck in the hand instead of a scepter
The head was decorated with a cocked hat.
Underneath was painted in large characters, GENERAL WASHINGTON.