In this chapter, Shechem rapes Dinah and Jacob's sons exact revenge against him and his town.
This chapter has been tough to write about. I think there's a lot of subtle interactions going on here, and at the same time I have a pretty strong emotional response too. I will try to outline these interactions and then state my opinions about how they work together to form the substance of what is going on.
First and most obviously, Shechem is committing a sin here. There's is no doubt that in both a modern and an ancient perspective, what he did was wrong. Jacob's sons are pissed off when they hear what happened, so there is no doubt that they consider Shechem as deserving punishment. Shechem's subsequent attraction to Dinah does nothing to make up for this.
What is not stated, but we can discern from the text, is that there is a power relationship here as well. Shechem is a very powerful figure, and Dinah and Jacob and Jacob's sons are in a position of weakness. There are quite a few factors that make this clear. Some of them are: Shechem is the son of Hamor and has a town named after him, he is "more respected than all the household of his father", and then later we see Jacob's fear that the Canaanites and Perizzites would wipe him out, because they are numerous and he is few. This is all obvious when we consider that Jacob very recently migrated back into Canaan, so just like Lot moving into Sodom, Jacob is a foreigner and a minority. He is wealthy, but he is vulnerable at the same time.
Shechem abuses his position of power over the much weaker Dinah. Dinah, being the daughter of Jacob, would have had no protection whatsoever apart from her family, and Shechem could easily expect no retaliation for his crime. This is exactly what we see when Jacob is told what happened, because Jacob remains silent, showing that he doesn't want to escalate the event into a conflict. This is not because Jacob is happy with what happened, but because of fear. This shows his weakness compared to Shechem.
Next, in light of this power difference, we see Shechem seek to marry the girl. This has a few different implications. First, it is a sort of compensation for the rape. This is because in this culture, a woman who is not a virgin is generally going to be ineligible for marriage. And in very general terms, the "point" of a woman was to get married. At the very least, women were largely a cost center in a family until they got married, at which point the father is recompensed with the bridal price. So, the father pays for the girl's food and clothing until she is old enough to marry, and then he gets repaid with the bridal price. If the girl cannot be married because she isn't a virgin, then her life basically falls into this void space because then she can never really leave her father's household and form her own household. I'm definitely oversimplifying, because we saw at least that Rachel was holding an occupation as a shepherdess, this what I've stated is definitely the overall trend of this era.
Note: I'm not saying any of this is fair, I'm just saying that's how it was in that time period.
So because of this, Shechem attempting to marry the girl is a form of compensation because he is basically agreeing to marry her rather than leave her in that void space of ineligibility. This is implication number one. (Men, of course, are always eligible to marry because they do not have the same expectation of virginity, so this analysis does not apply to Shechem.)
Implication number two is the one actually mentioned in this chapter, which is the absorption of Jacob's wealth into Shechem's family. Shechem and Hamor propose an alliance with Jacob out of a desire to "marry into wealth", which is a modern idiom as well. At this point, I don't consider their proposal sinful. I have heard some commentators say that their desire for money overwhelmed their prudence, but I actually think their offer is not unreasonable. Of course, they are once again taking advantage of their stronger position, but at the same time, this is a really decent offer for Jacob as well.
From Hamor's perspective, he gets to align with the wealthy Jacob, while from Jacob's perspective, he can attain protection from the much stronger and more numerous Canaanites. So while we can see Hamor and Shechem leveraging their dominance in this negotiation, I think they could reasonably point to the benefits that would go to Jacob if he accepted.
The third implication is the dissolution of the Israelite people. This is a really big deal to the Israelites and if they had no other reason to turn down Hamor, this would be enough. Simply put, Jacob is the current holder of God's promise to Abraham, that God would give him this land and make him a father of nations and multitudes. If he intermarried with the Canaanites, then the promise would basically be diluted through them, and they would inherit the promise along with Jacob. However, since the Canaanites did not (and would not) worship the Lord, they would violate their side of the agreement (cf. Genesis 28:20-22), and the promise would be nullified. So the importance of remaining a distinct people, faithful to the Lord, is equivalent to maintaining and holding onto the promise of God given to his forefathers and given to Jacob as well.
The fourth and final implication, which is related to the third, is that it violates the Mosaic principles of purity and separation from the idolatrous natives of Canaan. This principle is stated later, but it is related to maintaining Israel as a distinct people and staying free from the idols of Canaan. Nearly every time that Moses speaks about intermarrying with the natives, he relates this act with "worshiping their gods", that the Canaanites would draw them into idolatry.
So with all this said, we can see where is Jacob's position. Jacob was just offended, the rape of Dinah was an insult to him and to his family, but he is in a position of weakness compared to Shechem. Hamor's offer is, in natural terms, very beneficial to Jacob, but he cannot accept it because it would inevitably break his oath to God and invalidate the promise he was given. So he is in a difficult situation and Dinah is caught in the crossfire.
Next, Jacob's sons respond with deception. This just goes to show that the sins of Jacob have, in some measure, been passed on to his children. While he has gone through a redemption process and there is no sign that he lied in this chapter, he lied when dealing with Laban and Esau, and his sons clearly adopted this aspect of his behavior (as sons are apt to do). They trick Hamor and all his town into circumcising themselves as a condition for the marriage, and while they are in pain from this and still healing, Simeon and Levi (Jacob's 2nd and 3rd sons respectively) go and kill all of the men, every single one. I am really not entirely sure how this is even possible, that a town of at least several dozen men (we know it had gates, i.e. walls, so I would guess it is between 100 and maybe 300 residents, at most about 500), and yet they left no guard to stop just two men. Maybe they simply did not fear any attacker, being in their own country and with no obviously hostile groups around. Either way, it was their mistake and they paid for it with their lives.
The rest of Jacob's sons go and loot the town, taking all of the women and children as slaves (to keep or to sell) and taking all of the property and livestock. This is relatively standard protocol for invaders in this time period and we will see this same behavior later in the OT. We also see behavior like this in non-biblical sources, and many, if not most, slaves of the time were prisoners of war. I'm not really going to say it's "right", but it was definitely normal. And we have to keep in mind all of the implicit support for Shechem's actions, since he did this while Dinah was visiting the "daughters of the land". Dinah is perhaps one of the only innocent people in this story, as everyone else commits a crime either directly through their actions or implicitly through their support of somebody else's crime. The careful reader will note that Shechem was never punished or even rebuked for his actions by anyone in his family or town, or at least this was not recorded. Hamor continues to support his son in spite of his deed. I won't say I support the sons of Jacob in this, but I can understand their anger and frustration in the face of this stronger aggressor.
Jacob is angry because he fears being crushed by the other Canaanites, when they hear what happened, but as we'll see this doesn't happen.
Dinah goes on to live a life of sorts, but she is not mentioned again in the bible. Whether she ends up marrying, I do not know, but if she does, the biblical authors did not consider it significant.