The attackers lured the victims from their homes in the dead of night by shouting "thief", gunning down those who ventured out to intervene, decapitating them and setting one of their heads ablaze.
Survivors of the attack that struck a normally quiet corner of north Mozambique described the panic after 20 men armed with guns, machetes and knives stormed Naunde village.
Two young men who responded to the disturbance were captured and killed, said Mauricio Miranda, a village leader who survived the assault.
"They severed his head, stuck it on a log, roasted it with the fire from a burning car and they left it at the market," said a witness, Narciso Cassimo, shaking with rage as he described the carnage, standing in front of a burnt-out shell that was once a house.
Atanasio Nacir, the headteacher of the local primary school, and his deputy, Issufo Amade, raced towards the villagers who had come under attack as they slept.
"They burned the first car," Nacir told AFP on Thursday.
"We stopped and started watching. They burned another house. And that is when a lady screamed at us that 'you'd better get out because they are targeting men'," he said.
Nacir and Amade then fled to the nearby town of Macomia where they and hundreds like them have sought refuge.
- 'Sound of a gunshot' -
Amade said that he saw three white men among the attackers after being woken by the screams of a neighbour whose husband had just been killed.
"We went outside to try to find that lady... and then we heard the sound of a gunshot," said Amade.
"The three men I saw were white and strong. They were carrying large backpacks. They started burning houses, went into my house, took the clothes, told my family to leave, and burned down the bathroom."
Dozens of people have suffered similar fates this month in Mozambique's predominantly Muslim Cabo Delgado province in attacks blamed on radical jihadists.
Locals and authorities call the group "Al-Shabaab", although it has no proven link to a notorious Somali group of the same name.
The group, which conducted its first attack in October and is said by academics to want to impose sharia law in the region, has not published claims of responsibility or any demands.
- 'They burned everything' -
Naunde villagers attempted to repel the attackers with whatever weapons they could find but were struck down by gunfire.
"We had machetes and arrows. We tried to react and they began to shoot us. So we had to run away," said Miranda, a village elder.
The attackers torched 164 homes and four cars.
Mounds of debris, charred wood and scattered possessions are all that remains of many of the homes and businesses that once speckled the white sandy ground.
"In my house, they burned everything I had, my goats, my clothes, everything," said Cassimo.
After laying waste to the village for two hours, the attackers destroyed the bridge that connects the village to the outside world to frustrate rescue efforts, and fled the area.
More than half of Naunde's residents, who mainly work as fishermen and peasant farmers, have fled to the district capital Macomia.
The village's only school has closed and nurses have fled the local clinic.
Many of those who chose to stay behind are forced to sleep rough under palm trees while soldiers help to clear the area and begin the painstaking task of rebuilding.
Two days after Naunde was attacked, the village of Namaluco, which is just 20 kilometres (12 miles) away, was besieged in the same way and five villagers were killed, raising fears of more attacks.
The assailants came at night, slaying villagers and burning their homes. Mozambican soldiers are rebuilding the structures to provide shelter
Food, blankets and building materials are being brought to the stricken village -- 164 homes were destroyed and hundreds of people were displaced