At first they didn't because they thought germany was tooo small and restricted with the treaties and regulations made from WWI (hitler built his mighty Waffen S.S. in secret after all) and when they did realize it was an issue they just hoped that they would allow germany to take a few countries such as poland and hitler would be satisfied (as hitler said he would) however he continued and with the power of the mighty german military and their tactics such as the BlitzKrieg it was too late for the league of nations to stop germany without major conflict.