Steinbeck's description of Lennie's hands in the fight with Curley deepens our understanding of Lennie. Firstly, the fact that he has his hands at his side even while Curley assaults his face shows that he is not a violent man, but even more revealing is the depth of his simple mindedness - the shock of what is happening overloads his mind and he can't even raise his hands to defend himself.
Lennie's hands remained at his sides; he was too frightened to defend himself. (p.58)
Lennie then responds to George's urgings to defend himself by initially covering his face. Steinbeck describes Lennie's hands as "paws" to give us insight into the animal like strength Lennie possesses, and to give us a tantalizing hint of what he could be capable of if he were to respond to Curley's assault. Yet it seems Lennie won't fight back; another animal analogy is used to show the extent of Lennie's blind panic ("bleat"),
Lennie covered his face with his huge paws and bleated with terror. (p.58-59)
After more desperate urging from George Lennie finally responds to Curley's vicious blows by simply seizing his fist,
Curley's fist was swinging when Lennie reached for it. The next minute Curley was flopping like a fish on a line, and his closed fist was lost in Lennie's big hand. (p.59)
This action from Lennie confirms the massive strength that we had been led to believe that he has. Steinbeck uses the simile above to show the true extent of Curly's sudden helplessness brought about by Lennie simply using his abnormally large hand to squeeze the smaller man's fist. As it turns out it causes horrific injuries.
Steinbeck has therefore described the actions of Lennie's hands in this scene to both show his simple minded nature and to fully reveal the enormous power he possesses. Of course due to his simple mindedness it is a power that he has no real control over. The extent of this becomes tragically evident to us later in the novel when he meets with Curley's wife.