According to police, Pushpa Devi and Nanhe Yadav had a longstanding dispute over a piece of land on which the latter had started construction.
Pushpa Devi and her supporters objected to it, following which a broke out between the two groups.
"It turned serious after firearms were used, leading to the death of Ram Bahadur and Pankaj Singh, both belonging to different factions, police said.
Three others were injured in the incident who were admitted to hospital, police added.