Direct characterization occurs when an author explicitly states what a character is like: happy, humble, impetuous, angry, and so on. Indirect characterization occurs when a character is revealed through descriptions of their looks, by listening to what the character says as well as his private thoughts, how other characters react to that character and the character's actions. In Steinbeck's Of Mice and Men, much of the characterization is done indirectly. For example, Steinbeck never comes right out and states that Lennie is mentally disabled. Rather, he reveals Lennie's character through what he does, how he talks and what others say about him.
In the case of Crooks, Steinbeck chose to use both direct and indirect characterization. He is indirectly characterized in Chapter Two when Candy talks about him. He describes him physically as a black man who has a crooked back because he was kicked by a horse. He further relates that Crooks is a good horseshoe player, reads books, and is something of a fighter (because he wins a fight against "Smitty"). Candy seems to like Crooks although he does refer to him with a derogatory name for a black person, which would have been a common label at that time. In Chapter Three, Crooks is also characterized as having a face "lined with pain."
In Chapter Four, Steinbeck uses direct characterization to inform the reader that Crooks was "proud and aloof." The reader later understands that Crooks is aloof because he is often ostracized from the white workers on the ranch and that he spends a great deal of time by himself. In the same chapter, Steinbeck again uses indirect characterization to reveal that Crooks is terribly lonely and frustrated by his position on the ranch. He temporarily takes out this frustration on Lennie by suggesting that George might leave Lennie alone. Finally, the reader also understands that Crooks has the same dreams as the other men when he suggests that he could go with George, Lennie and Candy to the dream farm and work and live with them. Unfortunately, Curley's wife spoils this dream by reminding Crooks that, as a black man, he is virtually a second class citizen without the same rights as the white men.