The Amhara, who regularly complain of discrimination, have been angered by the government's decision to place a local district under the administration of the neighbouring Tigray region.
In videos shared on social media, the demonstrators were seen carrying signs that read: "Stop mass killing of Amhara people" and "Restore the historic border".
Gondar has for weeks been gripped by at times violent demonstrations over demands that the district, populated by the Welkait community, be returned to the Amhara region with which it has close ties.
Both groups say they suffer discrimination in favour of Tigrayans, who they say occupy the key jobs in the government and security forces.
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Ethiopian authorities say at least a dozen people have been killed in clashes with police over the territorial dispute over the past weeks.
In one deadly incident earlier this month, police said five officers and two civilians were killed after Amhara activists opened fire while resisting arrest for "criminal activities".
Yesterday's rally passed off peacefully.
Some of the protesters also used the occasion to express solidarity with the Oromo people, whose own demonstrations against alleged land appropriation left hundreds dead between last November and March, according to human rights groups.
Government spokesman Getachew Reda, who could not be reached yesterday, has previously accused the Amhara protesters of "working in cahoots" with the Eritrean government in a bid to destabilise the country.