"The terrorists stormed Maikadiri around 9:00 am and opened fire on hapless citizens," said resident Simon Templer. "They laid siege in daylight because there are no soldiers or police nearby," said another resident, Markus Ali, adding: "We counted 21 corpses." The attackers "killed, destroyed and then fled," Ali said.
A police officer in the Borno state capital Maiduguri confirmed the attack while requesting anonymity. Templer added: "My aged mother is currently in the bush.
Most of our people have fled and many houses and shops have been burnt." Maikadari is in southern Borno near the vast Sambisa forest, a longstanding hideout of the Islamist group Boko Haram.
The Nigerian army has led a series of raids against them in recent months, succeeding in freeing several dozen women and children from the hands of Boko Haram.
But several state governors in the region have said this week that the group continues to occupy the forest. The Boko Haram insurgency and efforts to quell it have claimed more than 15,000 lives and displaced 1.5 million people since 2009.
A new wave of violence has already killed more than 800 since Nigeria's new President Muhammadu Buhari took office in May pledging to stamp out the Islamists.