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I think with Gretchen you wouldn't have to explain it to that many people. Most peopl just know my niece as Greta; they don't even realize her real name is Margaret, because my sister always introduces her as Greta. People might be a little confused if you told them that your daughter's name was Margaret-called-Gretchen because Gretchen is almost exclusively an independent name in the US now, but just something like "Gretchen actually started out as a nickname for Margaret! Nick and I really love old-fashioned nicknames, so we decided to use an old nickname of one of our favorite girls' names." That should suffice.