George confides to Slim what he knows about Lennie's attack on the girl in the town of Weed.
"Well, he seen this girl in a red dress. Dumb bastard like he is, he wants to touch ever'thing he likes. Just wants to feel it. So he reaches out to feel this red dress an' the girl lets out a squawk, and that gets Lennie all mixed up, and he holds on 'cause that's the only thing he can think to do. Well, this girl squawks and squawks. I was jus' a little bit off, and I heard all the yellin', so I comes running, an' by that time Lennie's so scared all he can think to do is jus' hold on. I socked him over the head with a fence picket to make him let go. He was so scairt he couldn't let go of that dress. And he's so God damn strong, you know."
George was not present when the incident started. He and Lennie were immediately on the run from the angry mob, so George only knows what Lennie told him. Lennie does not understand his own impulses, and he lies to George all the time. He told George he just wanted to feel the girl's dress. If so, why did he have such a strong grip on it. He must have grabbed the dress by the hem and pulled it up, perhaps exposing the girl's legs all the way to her underwear. Naturally she thought he was trying to tear her dress off and rape her in broad daylight on the main street of a tiny mountain town.
When George sees the body of Curley's wife in the barn, he understands what was really happening in Weed. Lennie has a child's mind but a grown man's body. He is becoming interested in sex. But since he has a child's mind he is attracted to very young girls. Curley's wife is only fifteen or sixteen. The girl in Weed might have been even younger. What happens to George after examining Curley's dead wife in the barn is extremely significant.
And finally, when he stood up, slowly and stiffly, his face was as hard and tight as wood, and his eyes were hard.
"I should of knew," George said hopelessly. "I guess maybe way back in my head I did."
What George should have known in Weed was that Lennie was developing into a potential serial rapist and murderer of young girls. Lennie's fondness for petting soft little animals such as mice, rabbits, and puppies, was a sign of a budding interest in sex. He didn't set off with the intention of raping the girl in Weed, but that would probably have been the outcome if she hadn't started screaming and attracted so much attention. He didn't plan to rape Curley's child bride in the barn, but that too would have been the outcome if she hadn't started screaming just like the girl in Weed. George can see that if something isn't done about Lennie, he will keep attacking young girls and committing rape, or murder, or both. And George can't be watching him every minute.
George believes in the seemingly innocent reason he gives Slim for Lennie's attack on the girl in Weed; but after he sees Curley's dead wife in the barn and realizes that she must have been killed by Lennie while she was struggling to get away from him, George no longer believes that Lennie only wanted to feel the girl's dress in Weed. That in itself would have been bad enough.
No one was present in the barn when Lennie started stroking Curley's wife's soft hair. Only the reader knows what happened. But the reader doesn't know what might have happened if Curley's wife hadn't started screaming. To all the men, including George, it looks as if Lennie accidentally killed the girl while trying to rape her--and that is actually pretty close to the truth.