A small community on the Victorian — New South Wales border is in shock after a group of about 50 people shouting white supremacist slogans and carrying banners held a rally in their town.

The group — dressed in black, with most covering their faces with balaclavas — began the demonstration around midday at the Corowa RSL Park, before walking to the town's war memorial.

Corowa is just across the border from Victoria, where the use of Nazi salutes and symbols has been outlawed.

New South Wales Police said emergency services were called to the area following reports of an "unauthorised assembly".

Police said a crowd of about 50 people were dispersed from the area and no arrests were made.

Corowa resident Kendra Smith was driving home from the local pool with her partner and children when they saw the group.

"We just saw them all standing at the top roundabout with their signs," she said.

She said she thought the group was made up of men aged from their 20s through to their 50s.

"They weren't interacting with locals until they had finished," she said.

"And when they were walking through the RSL car park, some locals had gathered there and were telling them off, saying we don't want racist people here and to go home."

Ms Smith said outraged community members were following the group in their cars, "hurling abuse out their windows".

"It was a little hostile."

Ms Smith did not believe the group members were local and said she had never seen an incident like this in the town before.

"It was horrible because we do have a lot of people of colour here, it is just disgusting," she said.

"We did hear one of them say to a young local boy … I am not sure of his ethnicity … 'piss off you stink' — he would only be about 14 years old."

New South Wales Police said inquiries into the incident were continuing.