All 17 bodies, including those of two women, were decapitated, but it was not clear if they had been shot first.
A local official described the massacre as punishment for those attending a party with music and mixed-sex dancing.
"The victims were killed for throwing a late night dancing and music party when the Taliban attacked," Nimatullah, governor for neighboring Musa Qala district, told Reuters.
Afghan President Hamid Karzai denounced that killings as an "inhuman act and against all Islamic principals."
The Taliban has denied responsibility for the attack.