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Either on the Character panel/Control panel or in a paragraph/character style, you specify the language of the text. Then the appropriate dictionary is used.
Would it be possible to reset the default language to German from English and have ID highlight every change (to review)?
This isn't possible in the InDesign UI.
I'm not even sure that it could be done by scripting because the script would have to know the hyphenation at each hyphenation point in each language after recomposition.
What are you trying to do?
You may get close enough with a two stage process of first changing the language attribute throughout, and then checking the hyphenation. As Steve says, you can set the language in a paragraph style, and if all of yours are based on a single style you only have to change that one. Even simpler, you can search and replace the language format (under Advanced Character Formats).
As for checking hyphenation, today's thread on automatic hyphenation has some links to scripts that can help.
I often segregate Chinese and Japanese by language via character styles: GREP can distinguish CJK text from alphabetic by the coding, but I have to decide Chinese vs. Japanese.
Note that language is one of the attributes ID can import from word-processors; in my work the attributes are often wrong.