A group of 200 men used three bulldozers and weapons such as knives and rods to conduct the demolition of 47 homes in Sinphone village, as former squatters returned after being forced away previously.
The residents say some of them were attacked.
"They carried swords. More than 40 houses were destroyed. Some were injured," said Than Myat Soe, a villager.
A villager said many were injured. Having no idea who ordered the act, the villagers plan to lodge a complaint at Mingaladon police station.
The village was relocated to Shwe Paukkan Township in 1998 but some residents returned.
Residents, whose homes were destroyed, are now taking shelter at a monastery in the village.
“We will let them stay at the monastery until they have place to live," said the abbot at Dakkinaryon Monastery.
The villagers say the attackers wore green uniforms.