The huts were erected on government land by members of the Dalit community in the village a few months ago.
Over 100 huts belonging to Dalit families were gutted in fire in Bihar's Nawada district on Tuesday, police said. No casualties have been reported so far.
On Tuesday night, two people were reportedly seen setting fire to the huts.
The Bihar government has ordered an inquiry.
The huts were erected on government land by members of the Dalit community in the village a few months ago.
The people also have permanent homes inside the village. But they had requested the government to provide them this plot of land too as the land available to them was not enough for all families to survive.
The government, however, rejected their request because various communities in the village have been using the land for religious festivals for many years.
Reports suggest members of one community were extremely agitated over the continued occupation of the land and that they might be responsible for this incident.