This paper proposes a novel type of decentralized observers for a network system, where identical linear subsystems are interconnected. For this system, we derive a state-space model with block-triangular structure, in which the dynamics of the interaction among the subsystems and the dynamics of each subsystem are decoupled. Based on the decoupled model, we design a hierarchical decentralized observer, where a kind of centralized observer estimates coarse information on interaction among the subsystems and a decentralized observer estimates the state of each subsystem. Furthermore, we derive a necessary and sufficient condition of the observability for the decentralized estimation under applying the hierarchical decentralized observer.