When you say you went to a certain local Preparatory school, do you mean it was not The Preparatory school?

why would the GPA be calculated based on other student's scores?

I'm assuming that if it's a local school that the admissions staff will be familiar with the extent to which the overall student body is or isn't a competitive place, wouldn't they? And then make adjustments in their assessment of a student? Maybe less so if you are coming from a random school in Kansas or something.