The killings happened on Monday in the Bassa area of Plateau state, just a few days after at least five people were killed in the area.
“The people were returning to Zirechi (village) from Dundun when they were attacked by gunmen believed to be Fulani herdsmen,” state police commissioner Undie Adie told AFP.
“I can confirm that 25 villagers were killed while two were injured. A number of houses were also burnt down by the attackers,” he said.
No arrests have yet been made, he said, adding: “The terrain is mountainous. The assailants had fled before police could (get) there.
“We have launched a man-hunt for the killers with a view to bringing them to justice.”
He added: “We appeal for calm and for the people to sheathe their swords. The violence is not new. It has been a lingering dispute between the local people and Fulani herders.
“We are making efforts to resolve the problem.”
Plateau state governor Simon Lalong blamed “hoodlums who take advantage of conflicts among citizens to perpetrate killings and destruction of property in the name of ethnic crisis”.
The state lies in Nigeria’s so-called Middle Belt that separates the predominantly Muslim north from the largely Christian south.
The area has long been a hotbed of ethnic, sectarian and religious tensions between indigenous farming communities, who are mainly Christian, and the nomadic Hausa/Fulani cattle herders, who are Muslim.
Tensions have boiled over access to land and resources, escalating into a rift that has deepened along nominally religious lines.
Last week, at least five people were killed in the state while President Muhammadu Buhari rounded up a tour of Plateau and four other states hit by violence.
Nigeria has seen a growing number of clashes between herders and farmers over grazing rights since the beginning of the year.
Buhari has come under tremendous pressure to end the bloodshed but has been criticised for being slow to act because the Fulani are his kinsmen.