There's dramatic irony in this encounter, meaning that we as an audience know something that neither Ophelia, nor her father Polonius, to whom she's telling the story, do: that Hamlet has run to her just after his encounter with the ghost.
Ophelia describes Hamlet coming into her closet or small chamber with his clothing hanging loose, his stockings dirty and bunched around his ankles, and no hat on his head. He is also pale and his knees are knocking together. He looks pitiful, as if "loosed out of hell / To speak of horrors."
Hamlet then takes her wrist and, stretching her out at arm's length from him, stares at her for a long time as if he wants to draw her face. Then he hurries from the room, but with his head turned back to stare at her, so that he leaves not seeing where he's going.
Ophelia's reaction to this, having no idea what is going on, is "to fear it." She doesn't know how to interpret these actions, because when Polonius asks her if it is love, she says she can't say. Polonius, however, misinterprets this encounter as lovesickness and warns Ophelia to stay away from Hamlet.
This small scene shows how wholly frightened Hamlet is by his encounter with the ghost, and suggests that he is in love with Ophelia, as she seems to be the first person he runs to after the shock.