Deputy Inspector General of Police Arun Kumar said the women between 32 years and 50 years were beaten to death with sticks by residents of Kanjia village midnight last night.
Their bodies were then put into sacks and thrown outside the village.
When police went to recover the bodies this morning, the superstitious villagers protested.
Rumours against the five women were spread after the recent death of two to three persons in the village.
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Jharkhand Chief Minister Raghubar Das said, "In the age of knowledge, this incident is sorrowful. The society should ponder over it."
Condemning the incident, Jharkhand State Women's Commission chairperson Mahua Manjhi said a strong policy was needed end such incidents.
She said lack of education, awareness and road connectivity to towns and cities, besides unemployment were reasons behind 'dayan bisahi' (superstition of witchcraft) in the state.
Jharkhand accounts for 54 out of 160 cases of murders where women were branded witches and killed in 2013 and a total of 400 women have been murdered with the same motive since 2001 in the state, according to National Crime Record Bureau.