Wow, so many people on this thread are wrong.
Games that hold your hand is a term used for when a developer creates a game with the mindset that the player is a complete and utter moron, and feels the need to throw in unnecessary elements in there to keep the player in the right direction, for not once should that player stop for a moment and go. "Huh, I wonder where/what I should do next..."
There was a trend in the creation of games a few years ago that, within certain games. (That one Transformers game and the single-player of a lot of FPS games comes to mind rather quickly but I do recall many, many others.) They will give you an objective, and if you haven't done it within X amount of time, the person or persons that gave you that objective will hurry you along.
for example.
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(Scene: A warzone in an unnamed middle-eastern country, two sides are fighting against each other for whatever known reason)
Enter stage left, A butt-load of tanks all coming to get you and your team.
Captain: Rookie! Get up on the second floor of that building and grab a bazooka to take out those tanks!
(Waypoint shows up on compass telling you exactly what building he was talking about and the exact location of the bazooka despite you never being in that building before. You just happened to have been across the battlefield when this command was given to you.)
2 minutes go by while you make your away across the field trying not to get shot.
Captain: ROOKIE! WE NEED THAT ANTI-ARMOR SUPPORT NOW!!
2 more minutes!
Captain: ROOKIE!! WHERE ARE YOU!
(You finally arrive to the building pointed out to you. Not only do you find the bazooka, but you find 6 or 7 of your team-mates shooting their rifles at tanks out the windows... -,-; You pick up the bazooka.)
Captain: GREAT! You found it! Now take out those tanks!
(No shit sherlock, you've been screaming at me for the past 10 minutes about it...)
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Now we can probably all agree that this is not only, annoying as hell, but completely unnecessary...
Let's look at another example. With Boss fights. The most memorable boss fights that we know of today, are those that consist of bosses having a bunch of attacks and a set pattern of which we much avoid them.
That in a way kind of holds your hand but developers have found out that this made the game more enjoyable because then players were able to figure out the bosses pattern and exploit it.
The worst of these kinds of battles are when the Boss only has 2-3 kinds of attacks, and a lot of health, so you cycle through these patterns over and over again till he is dead and your brain hurts from the rinse and repeat.
Then of course, they decided to dumb it down even more. There are games out there where the boss had a weakness that you could exploit, but you had to look for it.
A good example in games that hold your hand these days is the example of Boss fights with "Insert knife/bomb here, boss go dead/boom" weak points that are most of the time color coded.
They are pretty much saying that the character you're playing as, knows exactly how to defeat this mofo even if he had never seen this creature/person before.
What they could have done, and what they should do to keep the game feeling like it is holding your hand is...
Let's say you're playing as a warrior, you're traveling down a deep dungeon filled with baddies and hopefully some treasure, and most likely is the home of something that will mud stomp you in the pooper if you make it angry.
This boss happens to have a weak spot, perhaps for the sake of easy explanation, weak knees... Your character does not know this, because he does not know that this boss exists yet, and if it turns out to be his quest to defeat this boss given to him by the mayor of a town just outside of the dungeon, it is still going to be his first time fighting this boss, he doesn't know anything.
What if this dungeon used to be a mining facility owned by the town? What if this boss was the reason why it was shut down? Perhaps you will find old relics from the miners in these caverns, what if some one decided to write down something on a parchment that hinted at the boss, not necessarily giving away the weakness but explained it a bit? Leaving the player to figure out if there were any clues to what would bring this thing down?
That's not holding your hand at all, because it's not telling you directly what the weakness is, leaving the player to figure it out for himself, and even if he misses this scroll of information, he would still eventually figure it out some how...