In John Steinbeck's novel Of Mice and Men Candy is misunderstood because his is disabled and because he is old. Candy is disabled because he has only one hand. In the world of manual labor and of the farm, able bodied workers no longer perceive a value or worthiness in someone whose ability to do work is limited by disability, illness or old age. Candy is also old, which heightens the affects of his disability and reduces the respect the able workers have for Candy's ability to think and respond quickly and agilely. On the farm, seconds in response count, as Candy's loss of a hand clearly shows. Candy is misunderstood and thought to be useless, worthless, slow, and incompetent; his dignity, experience and wisdom are wholly overlooked. Candy's dog is shot and is a foreshadowing portent of what is awaiting Candy and a literary symbol of the end Candy must expect.
The most obvious way I can think of that Candy is misunderstood is when it comes to his dog. The rest of the ranch hands seem to think that Candy can be objective about the dog. They think he will see that it should be killed and replaced with another dog. It might be logical, but they don't understand how attached he is to the dog. He probably identifies with it because he is afraid that the boss will throw him out once he is too old to work anymore.
As far as effects go, killing the dog makes him want to leave the ranch and go with Lennie and George to the farm they dream of having.
In the short novel "Of Mice and Men" Candy is a person who ahs to clean up the bunkhouse. He had been a ranch hand but was disfigured and lost his hand. He is older and not of much use to anyone. Candy is what the other ranch hands don't want to become but at one time will all have to face.
The thing that the men do not understand about Candy is his love for his old and smelly dog. They do not understand why he has not put the animal out of its misery. Candy still sees that the dog has some good times left because it is still affectionate with him and responds to him.
Carlson has no ability to relate to Candy's relationship with the dog. Carlson is not a very nice person and looks froward to shooting Candy's dog. After he kills the dog Candy turns over in his bunk away from the others. They can not know just how lonely Candy feels.