Centennial Hill is a hill located near Ponyville, Equestria that was used to witness the Centennial Celebration. Prior to the event, Spike had prepared a picnic worth of food for his friends to enjoy as they basked in the wonder of the falling stars. Unfortunately, poor little Spike put to much effort in the picnic and grew to tired to watch the event, falling asleep on the hill while his friends doted on him.
During the shower, the Mane Six, Cutie Mark Crusaders and countless residents of Ponyville watched in awe and grew closer as they witnessed the star shower.
Some fans consider the events that transpired on the hill to be a turning point in the shows dynamic. It was one of the first moments where the Mane Six show genuine affection towards Spike (with prior episodes often treating Spike more like a prop than a character) and likewise was one of the first actual interactions between Scootaloo and Rainbow Dash, which would become one of the most celebrated character dynamics in the entire series.
As noted above, the scenes on the hill would quickly become some of the most iconic imagery in the early Brony fandom, with modified versions of the hill being popular backdrops for fan media, and wallpapers.