"I heard the gun shot, I know what a gun sounds like," the neighbour told Hawke's Bay Today yesterday.
"She was just a crazy woman running around with a gun."
The neighbour, who wished to remain anonymous, described the incident as a "tribal war" and decided police involvement was required after the gun was pointed at her head and chest.
Court documents said Marshall raised the gun to her neighbour before a "violent struggle" ensued as the neighbour attempted to wrestle the weapon from Marshall by grabbing the barrel.
The neighbour, who was struck on the head with the butt of the gun during the scuffle, said armed police responded to the incident and found Marshall at her home waving her gun about and "threatening to shoot [her] and [her] dogs".
"When you point a gun at me, you're going down - she can't be going and doing those sort of things," the neighbour said of Marshall's arrest.
She said her bull mastiff cross and her other dog, both of which were unregistered, were taken to the pound following the incident.
Court documents said the dog is still to be examined by a vet to reveal the extent of its injuries.
Marshall told police she shot her neighbour's dog because it had killed her ducks and lambs. She declined to comment to Hawke's Bay Today but said she was an "animal lover" and was "sorry" for her actions.
Reparation for a vet's bill is yet to be confirmed, while police sought a court order for the destruction of the weapon.