The seizure of towns suggests a significant shift in strategy, more in keeping with their stated goal of carving out a strict Islamic state in northeastern Nigeria.
Residents who fled the assault on the fallen town of Buni Yadi in Yobe state said attacks began late last month and the insurgents have since taken over the main government building.
The militants have reportedly raised their flag and carried out summary executions, including of two people who were caught smoking cigarettes.
But he told AFP, "As I speak there are no military in Buni Yadi and locals say that Boko Haram come and go as they please.
More From This Section
"So many people from Buni Yadi have fled to the state capital Damaturu," he added.
There was no immediate comment from the military in the Yobe state capital Damaturu or Abuja.
But residents said the rebels, who massacred dozens of students at a boarding school in Buni Yadi in February and kidnapped more than 200 schoolgirls from neighbouring Borno state in April, had set up roadblocks.
The United Nations has confirmed that Boko Haram had seized control of the towns of Damboa and Gwoza in Borno state in recent weeks.
There are indications that Damboa was retaken by the military in an offensive earlier this month.
"The capture and holding of territory presents a significant evolution in Boko Haram's modus operandi," said Ryan Cummings, chief Africa analyst at the South Africa-based crisis management group Red 24.
He told AFP that trend became evident in April, with many districts in the northeast threatened by an Islamist takeover and Nigeria's embattled military struggling to reverse the rebel gains.
Cummings said Boko Haram's recent advances indicated the group was "slowly but surely out achieving its primary goal -- the creation of a caliphate in northern-eastern Nigeria governed under sharia law."
Yobe, Borno and Adamawa states have been under a state of emergency since May last year and reliable information on the conflict has proved difficult to obtain.
Few humanitarian workers are on the ground and the military has sought to restrict the flow of information.
Cummings said the situation may deteriorate further.