By <https://arxiv.org/abs/1406.4419> (The fundamental groupoid as a terminal costack, Ilia Pirashvili), we know that for a topological space $X$, the $2$-functor
$$\text{Top}(X)\rightarrow \text{Gpd}, \quad (U\rightarrow X)\mapsto \Pi\_1(U)$$
is a $2$-cosheaf, in fact the terminal one. In particular, it follows that
$$\text{Top}(X)^{op}\rightarrow \text{Gpd}, \quad (U\rightarrow X)\mapsto \text{Hom}(\Pi\_1(U),\mathcal{G})$$
is a $2$-sheaf, where $\mathcal{G}$ is a groupoid. However, if we assume $X$ is a manifold (probably locally simply connected does the job, but I want to be cautious), then for any point $x\in X$, open simply connected sets $U\ni x$ are final in all open neighborhoods of $x$. Hence the stalk of this $2$-sheaf is
$$\text{colim}\_{U\ni x}\text{Hom}(\Pi\_1(U),\mathcal{G})\cong \text{colim}\_{U\ni x,\text{ simp. conn}}\text{Hom}(\Pi\_1(U),\mathcal{G})\cong \text{colim}\_{U\ni x,\text{ simp. conn}}\text{Hom}(\{x\},\mathcal{G})$$
where I denote by $\{x\}$ the groupoid whose objects are $\{x\}$ and has no automorphism (I think this is called the trivial groupoid). If we assume that $\mathcal{G}$ is a group $G$, then we get that the stalk consits only of the trival morphism.


However, having trivial stalks means that $\text{Hom}(\Pi\_1(-),G)$ is trivial $2$-sheaf. But surely this can not be true, as that would mean
$$\text{Hom}(\Pi\_1(X),\text{Gl}\_n(\mathbb{C})$$
is trivial, which is not true. Hence there is a gap/flaw in my reasoning, but I don't see it.


Basically, as $\Pi\_1(-)$ is the terminal $2$-cosheaf, $\text{Hom}(\Pi\_1(-),\mathcal{G})$ is the initial $2$-sheaf, but that would mean that there are almost no representations of the fundamental group, which seems wrong to me.



Representation of fundamental groupoid as $2$-sheaf
First of all, note that you haven't used the fact that $\Pi\_1(-)$ was the terminal $2$-cosheaf, just that it was a ($2$-)cosheaf.


Then, as I pointed out in the comments, there's a question of whether you're considering the usual $\hom$ functor into $Set$, or the internal $\hom$ with values in $Gpd$.


* If you're considering the usual, external $\hom$, then the question is more about whether $\Pi\_1(-)$ is a cosheaf than a $2$-cosheaf. But note that if you're considering $\hom$ into $Set$, then $\hom$ is *not* equivalence invariant. In particular, $\hom(\Pi\_1(U),\mathcal G) \not\cong \hom(\{x\},\mathcal G)$ even when $U$ is simply-connected. For instance if you take for $\mathcal G$ an indiscrete groupoid on a set $S$ of objects, the former is $\hom\_{Set}(U,S)$, while the latter is $\hom\_{Set}(\{x\},S)$. So your stalk computation doesn't work anymore.


(to perhaps get a better grasp on this, compare $\hom(2^{in},BG)$ and $\hom(\{x\},BG)$ where $2^{in}$ is the indiscrete groupoid on $2$ objects, and $BG$ the one-object groupoid associated to the group $G$)


* If you're considering the internal $\hom$, and looking at stacks/$2$-sheaves (so that you do have invariance under equivalence), then $\hom(\{x\},\mathcal G)\cong \mathcal G$, so it's definitely nontrivial.


(moreover, note that in this context of stacks, or $2$-sheaves, you need to be more careful with colimits: this would probably be a $2$-colimit, so you'd need to check that the subcategory of simply-connected neighbourhoods of $x$ is final in the $2$-categorical sense in the category of neighbourhoods. This is a rather stronger condition than just finality in the $1$-categorical sense, and here I'm not sure whether it would be satisfied in general - I'm definitely not an expert on stacks and $2$-categories so I can't say much more)


