The killings occurred late yesterday north of Firoz Koh, the capital of Ghor province, with the local government calling it a revenge attack after a local IS commander was gunned down.
ISIS, which controls territory across Syria and Iraq and is making steady inroads in Afghanistan, has so far not officially claimed responsibility for the attack.
"Our security forces with the help of locals conducted an operation and killed a Daesh (IS) commander yesterday. Daesh fighters in return abducted around 30 villagers, mostly shepherds," Ghor Governor Nasir Khazeh told AFP.
Abdul Hameed Nateqi, a Ghor provincial council member, gave a similar account to AFP, adding that the assailants were Taliban renegades who had sworn allegiance to IS.
The killings underscore Afghanistan's unravelling security situation as the resurgent Taliban continue a push into urban centres 15 years after they were toppled from power.
IS fighters have been trying to expand their presence in Afghanistan, winning over sympathisers, recruiting followers and challenging the Taliban on their own turf, primarily in the country's east.
In March, Afghan President Ashraf Ghani announced that the Islamists had been defeated after local security forces claimed victory in a months-long operation against the group.
The latest devastating attack in Ghor represents a major escalation for IS, which has so far largely been confined to the eastern province of Nangarhar where it is notorious for brutality including beheadings.
"(IS) announces its emergence in Ghor by murdering dozens of civilians," said Borhan Osman, a researcher with the Afghanistan Analysts Network in Kabul.
Osman added that the IS group in Ghor comprised mainly of former Taliban fighters.
The Afghan government is currently in the middle of an operation, backed by NATO airstrikes, against IS in the province.
The Taliban, who are in the middle of their annual summer offensive and are more powerful than IS, denied any involvement in the Ghor killings.
The militant group, which has stepped up nationwide assaults on the Western-backed government, is known to distance itself from attacks that result in large civilian casualties.
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