The mystic allegedly punched and kicked two toddlers and an eight-month-old baby to death during exorcism rituals on Tuesday and Wednesday nights, according to police and relatives.
Local lieutenant-major Kyaw Naing Soe said the "exorcist" put the villagers into a trance, then killed the children as they watched.
"On the night of the 18th, the three-year-old boy was beaten to death and the culprit threw him in the Twante canal," he told AFP.
"On his return, he continued to beat the three young girls and two of them were killed."
The uncle of the dead boy, Tun Naing, said the villagers had lost their senses after the exorcist fed them "blessed" water, then made them stand in a circle as he chanted and cast spells.
"Because of what he did everyone was out of their mind," Tun Naing told AFP, his eyes still glazed.
"I still feel afraid of something in my mind. I don't understand what is happening... Some people have gone to other mystics to release themselves from the curse."
Only a handful of people attended the dead boy's funeral on Saturday in Twante, a town south of Myanmar's main city Yangon.
Tun Naing said most family members were still too scared to show their faces in public.
Young novice monks covered their noses with their maroon robes to block the smell as the boy's tiny body was carried past on a stretcher, before being buried in an unmarked grave.
A police report said the bodies of the dead children -- a boy, three, a two-year-old girl and the baby -- showed evidence of being punched, kicked and stamped on.
Hospital workers alerted authorities after the father of another little girl who had been beaten brought her to hospital covered in bruises.
Police have charged the "exorcist" with murder, grievous bodily harm and hiding a dead body. He is being held in Insein prison near Yangon.
While the majority of people in Myanmar are Buddhist, many also believe in spirits, astrology and "yadaya" -- magic used to ward off evil or misfortune.
Former military ruler Ne Win was famously superstitious, and caused economic chaos in the late 1980s when he changed the denominations of the currency to add up to his lucky number nine.
Despite the onslaught of smartphones, Western brands and luxury hotels that have arrived since the junta ceded power in 2011, many people still consult fortune tellers and mystics for guidance.
