The sorting hat thinks itself God.

It's understand, if in the right state of mind. It's all knowing, all seeing. The second it falls upon ones head it is in their soul.

It knows all the memories that are burned into you, hears all your thoughts and sees all that you could ever do.

Then it places you in the house it most desires for you, sealing you to your destiny.

For what most don't know is if one is placed in a different house, their fate would have been different.

But destiny cannot be changed after it is sealed.