In Chapter Four, Crooks asks Lennie to think about what might happen if George does not come back from town. Since Lennie cannot answer the question (he does not "understand" its meaning), Crooks answers it for him:

They'll take ya to the booby hatch. They'll tie ya up with a collar, with a dog.

In other words, Crooks suggests that a life without George would be catastrophic for Lennie: he would find himself confined in a psychiatric hospital ("booby hatch") where he would endure all sorts of cruel and degrading treatments. This idea highlights Lennie's total dependence on George which is clear to Crooks and the other men on the ranch.

Crooks tells Lennie that he will go to the "booby hatch" because he wants him to understand how lonely life can be without a companion. This backfires, however, and Lennie becomes angry, demanding to know who has "hurt" George. This demonstrates Lennie's lack of understanding: in his mind, George would never leave him. Only some awful injury could prevent his return.