It appears to mean more "chief gangster" than "thug".

I was specifically asking about the thug-meaning of goon in my original query, maybe that wasn't clear. Dictionaries give two separate senses for goon, the "idiot" sense, and the "thug" sense.

Anyway, in this book, it really means thug; it's used repeatedly in that sense in the speech of people in the book I'm reading (which is, of course, at home right now).

For example, the rent-collector (representing the landlord) comes around with two goondas to trash the apartment of the main character, after accusing her of running an illegal factory (two fellows on sewing machines) out of her apartment. The goondas punch the two tailors, bash the sewing machines, destroy the furniture, break the windows, and threaten to come back in 48 hours if she doesn't vacate the facilities. Definitely the "thug" meaning there.

I did find something on Word Detective:

The use of "goon" to mean "hired thug" probably derived from this "idiot" sense, but another theory (proposed by Hugh Rawson in his excellent book "Wicked Words") traces it to the Hindi word "gunda," meaning "hired tough," apparently often spelled "goondah" in British newspapers of the 1920s.