Who was involved in the Whiskey Rebellion and why were they protesting? What action did the government take and why was this important?
The Whiskey Rebellion was mostly a movement of the western frontiersmen over the perceived unfairness of a tax on whiskey. Read more below.
As part of Hamilton's scheme to reduce the national debt, the government levied a tax on spirits. Whiskey was the most popular domestic spirit, and it was especially popular in the west. (These being the early days of the union, "west" meant the region stretching from the western end of Pennsylvania through the Appalachians.)
People resisted the tax, mostly by not paying it and sometimes by fighting the people who told them to pay it, and all of this was very bad for the fledgling US government. The states were only nominally united. The Constitution had just been ratified. There was talk (granted, there's always talk) of secession.
The important thing about the government's response was that, in addition to raising a militia, Washington himself came along and talked to the leaders of the insurrection. This showed that he was essentially equal to them, which was vastly different from how anything similar would have been handled under the English. As my APUSH teacher described it, he treated them like adults then basically told them to go home and write their Congressmen if they didn't like the taxes.
It showed that the government was not above or inaccessible to the common man.