According to reports, smoke has been emerging from cracks in the ground in Mohammadi area and the land is heated up underneath.
Bela Pahara and Muda Galib villages have been affected.
"You cannot walk barefoot because the ground is almost on fire. The cattle is getting restless and we are now moving out because you never know when the flames break out. We have never seen something like this," said Munawwar Naqvi, a local farmer.
Farmers are also getting increasingly apprehensive about damage to vegetable crops.
While villagers claim that this could be the beginning of a volcanic eruption, local revenue official, Vikas Dubey said, "The incident is a natural phenomenon in which fire breaks out in underground humus layers."
He said the land where the underground fire occurred has been lying barren for several decades and dry leaves, twigs and branches from nearby jungles accumulated there and formed the underground humus layer.
He said that: "The overground fire had been put out but it unknowingly caught the humus layers which resulted in smoke emission from the cracks."
Meanwhile, Divisional Forest Officer Sameer Kumar said forest officials were sent to dig up trenches around the affected land to prevent the spread of fire to the nearby forest area.
Field Director of Dudhwa, R.K. Pandey said that swamps often develop underground holes in which organic matter accumulates and scorching heat sometimes results in such underground fire.
( With inputs from IANS )