Gangs have been terrorising areas of the northwest in recent years, forcing thousands to flee and gaining global notoriety through mass kidnappings at schools for ransom.
Local elder Abdullahi Karman Unashi told Reuters that the men entered Dankade village in Kebbi state on Friday night and exchanged gunfire with soldiers and policemen.
Security forces were forced to retreat, leaving the attackers to burn shops and grain silos and take cattle into the early hours of Saturday, he said.
"They killed two soldiers and one police officer and 50 villagers. (They) kidnapped the community leader of Dankade and many villagers, mostly women and children," Karman said.
It came a week after armed men killed 200 people in the nearby state of Zamfara. read more
Didzi Umar Bunu, son of the abducted community leader, said the gunmen had returned early on Sunday and torched more houses.
"They have not called or made any ransom demand. Dankade village is littered with dead bodies," he said on the phone.
Nafiu Abubakar, police spokesperson for Kebbi, did not respond to calls and messages to his phone.
Kebbi shares a border with Zamfara, where the government in September started a military offensive and imposed a telecoms blackout to rid the state of gangs it calls terrorists.
Violent crime has compounded the challenges in northern states, which are typically poorer than in the south.
President Muhammadu Buhari said in a statement that the military had started a major military operation in Niger state, next to Kebbi, to clear bandits and Boko Haram insurgents running from a government offensive.