Nunley said the man's 1997 Cadillac was one of the last vehicles in the parade and the driver might have suffered an unspecified medical problem when his car accelerated to about 40 kph and struck the crowd on a two-lane bridge along the town's main road. The driver was among those taken to hospitals.
"It is under investigation and charges may be placed," Nunley said.
Witnesses said the car had a handicapped parking sticker and it went more than 30 metres before coming to a stop.
"He was hitting hikers," said Vickie Harmon, a witness from Damascus. "I saw hikers just go everywhere."
Amanda Puckett, who was watching the parade with her children, ran to the car, where she and others lifted the car off those pinned underneath.
"Everybody just threw our hands up on the car and we just lifted the car up," she said.
Keith Neumann, a hiker from South Carolina, said he was part of the group that scrambled around the car. They pushed the car backward to free a woman trapped underneath and lifted it off the ground to make sure no one else was trapped.
"There's no single heroes. We're talking about a group effort of everybody jumping in," he said.
Nunley cited quick action by police, firefighters, paramedics and hikers to tend to the victims, including a volunteer firefighter who dove into the car to turn off the ignition. The firefighter, whose name wasn't released, suffered minor injuries.
Mayor Jack McCrady encouraged people to attend the festival on Sunday, its final day.
"In 27 years of this, we've never had anything of this magnitude, and is it our job to make sure it doesn't happen again," he said.
-AP