Curlley's wife inadvertently ruins George and Lennie's dream of owning their own farm and escaping from the drudgery and wage-slavery that has been their lot in life. The girl is flirtatious and irresponsible. Most of the men see her as potential trouble, especially since she is married to the volatile Curley, who is always looking for her and checking up on her. Judging from her behavior and from the part of her life story she tells Lennie in the barn, she is still young and naive; otherwise she would probably know better than to flirt with a feeble-minded giant like Lennie, who maimed her husband and who kills animals by petting them too hard.
When George sees her dead body he understands that Lennie has become a menace to society and has to be killed. The fact that George steals Carlson's gun proves that he has no intention of helping Lennie escape again, as he did in Weed. The reader feels pity for the girl for losing her whole life and the illusions that went with it. At the same time the author has shown a vicious side of her that moderates the reader's sympathy. Steinbeck wanted the reader to feel sorry for Lennie and for George. If the dead girl was nothing but sweet, and pure, and innocent, and beautiful, the reader would feel the same sympathy for her as it feels for Lennie (perhaps even the same hatred that is felt by Curley) and the ending would be far different emotionally.
Her accidental death at the hands of Lenny puts George and Lenny in a fugutive position. They must escape the ranch before anybody finds her body and catch the people who killed her.
Before her death however, George and Lenny had planned to work on the ranch until they both accumulate an adequate amount of revenue to purchase their own land and settle there. The son of the owner of the ranch - Curley, has an inferiority complex because he is short-statured, and he despises Lenny for being tall and big.
This inferiority complex compounded with the fact that Lenny accidentally killed his pretty wife, gives Curley extra incentive to hunt down Lenny.
George and Lenny can no longer work on the ranch and must run for their lives. George has to kill Lenny to spare him from the lynch mob. That is the downfall of George and Lenny's dream.