According to the dialogue in Chapter 1, where are Lennie and George going and why are they going there?

John Steinbeck called Of Mice and Men "a playable novel." He wrote it in such a way that it could be quickly and easily adapted into a stage play. He did this because he had an agreement to have the play produced in New York the same year the book came out, which was 1937, while America was still suffering from the Great Depression. In a stage play the exposition is necessarily conveyed to the audience through dialogue. That is why Steinbeck does the same thing with the book. George and Lennie do a lot of talking, but much of their dialogue is intended to convey information to the reader or to the theater audience. For example, George says:

"That ranch we're going to is right down there about a quarter mile. We're gonna go in an' see the boss. Now, look--i'll give him the work tickets, but you ain't gonna say a word. You jus' stand there and don't say nothing. If he finds out what a crazy bastard you are, we won't get no job, but if he sees ya work before he hears ya talk, we're set. Ya got that."

In this "playable novel" we learn about past, present and future through dialogue. Lennie got in trouble in Weed. He is retarded. They went to San Francisco and got "work tickets" from a hiring hall for unskilled laborers. They are on their way to the ranch south of Salinas where they have been sent. Steinbeck has George decide to camp by the river overnight mainly so that he can have the two men discuss their past, present and future in private. They will have little privacy once they get to the ranch. We will learn that Lennie assaulted a girl on the street in the town of Weed and that they had to flee for their lives with a mob of men chasing them. They have no money and are down to their last three cans of beans. They will be in a desperate plight in the future if they don't get the jobs at the ranch tomorrow.

Steinbeck intentionally created a mentally retarded character in Lennie because it made it plausible that George would do a lot of explaining to him, and in doing so he would be explaining a lot to the reader and to the future theater audience in New York. By the end of the first chapter we know nearly everything about these two men and their relationship. We know that they have a dream of owning a little subsistence farm so that they won't have to travel all over California like bums and work like slaves with no hope of improving their lives. 

Since George says that the ranch is only about a quarter of a mile from where they are camping, the setting of their campsite will give the reader a pretty good notion of the entire region. Later he will tell Lennie:

"I seen thrashin' machines on the way down. That means we'll be bucking grain bags, bustin' a gut."

The reader can picture vast fields of grain being harvested and crews of men loading heavy gunny sacks onto wagons under the hot sun. Such scenes are not actually depicted in the novel because they could not be shown in a stage play. Most of the action in both the novel and the play will take place in a bunkhouse or in a barn. The novel was subsequently adapted into two major motion pictures, and in both productions the filmmakers "opened up" the story to show big outdoor scenes of the lush California fields with the mountains in the background.