A resident who spoke on anonymity said the argument between the group comprising 20 youths turned ugly when some of them started attacking each other with machetes which resulted in two people sustaining head injuries.
Co-incidentally, the incident occurred during a blackout in the area.
"Since then, some residents have been receiving calls from relatives of the injured victims who apparently threatened to burn the houses of those who harmed their relatives," she said, Monday.
"I am worried as this might lead to a serious issue which might jeopardise the safety of residents here," she said. It is understood that at least one family has moved out in fear of reprisals.
City Police Chief ACP Jauteh Dikun, when contacted, said the incident was caused by misunderstanding, which ended in two people receiving eight stitches to the head.
He advised those who have received threats to lodge a police report.
The village was the scene of a major fire earlier which saw over 500 people being made homeless.
The authorities have since fenced up the area with barbed wire with a warning that any attempt by the squatters to rebuild their homes in the area is prohibited.
Residents claim that despite the fire, more new faces have been turning up in the area.