The victim was hit with red-hot tongs (chimta) in the presence of a tantrik and other villagers Wednesday night.
The Bhinder Kalan village headwoman, Pal Kaur, her husband and the tantrik have been arrested following the death of Veerpal Kaur, resident of an adjoining village.
Veerpal was brought to the village headwoman by her father as she remained unwell and doctors had not been able to cure her, a police official said.
"The sarpanch told her father that Veerpal was possessed by evil spirits and she (sarpanch) could rid her of that," the police official said.
Police have arrested the trio and charged them with murder.
Moga is about 180 km from Chandigarh.