The people living around the lake worship Old Johnny as their god. They have worshipped him for so long, and done so in sufficient numbers, that he has actually become a god of sorts; an unthinking, voracious, alien god, but a god all the same. Old Johnny "knows only his own cold hunger" (Milk's line) and unconsciously wills his worshippers to assuage it. They do this by spreading rumours around the neighbouring lands that there are several giant crayfish, ripe for the eating, in their lake - and all are welcome to try to catch them at a small price in gold. Old Johnny then feasts on the unwitting adventurers, fishermen and thrill seekers who are attracted by these rumours.
He also gives us a bit of detail on Old Johnny's worshipers and their fiendish methods.