Clarissa Pinkola Estes retells folk tales in Jungian psychological terms. She regards all characters and events as the stories of the development of a soul.
To her the Handless Maiden is a descent of the conscious into the underworld of the subconscious brought on by difficulty and loss. It's a transformation, a "rite of endurance", a toughening of tender spirits, and the loss of hands is specific and important to the story.
We can understand the removal of psychic hands in much the same way the symbol was understood by the ancients. In Asia the celestial ax was used to cut one away from the unillumined self. This motif of cutting as initiation is central to our story....the hands of the ego must be sundered... in order to take us away from all seductions of meaningless things within our reach, whatever it is that we can hold on to in order not to grow. If it is so that the hands must go for a while, then so be it. Let them go.
In this metaphor of cutting off the hands, we see that something will come of it. In the underworld whenever a thing is not able to live, it is taken down and cut apart to be used in another way. This woman of the story is not old, not sick, yet she must be dismantled for she cannot be the way she has been anymore. Forces are waiting for her to help her heal.
But cutting off her hands, the father deepens the descent, hastens the disolutio, the difficult loss of all one's dearest values, which means everything, the loss of vantage point, the loss of horizon lines, the loss of one's bearings about what one believes and for what reason.
With the cutting off of the hands, the importance of the rest of the psychic body and its attributes is emphasized...for the deep and dismembered woman is going to do her work. And as gruesome as it may seem at first, this new version of her body is going to help.
-Women Who Run With the Wolves, Clarissa Pinkola Estes