"It's only a small strip of grass — about half a metre by a metre — and the younger man wants it mowed and for some reason the older man does not," said one neighbour, who asked not to be named.
"It seems like the issue came to a head when the younger man was going to mow the strip."
Inspector Stuart Campbell from Port Macquarie Police Station said officers were collecting video footage of the incident and speaking with other neighbours.
"There are a few different versions of what's occurred, so we're trying to decipher the most correct one at the moment," he told AAP.
"It's a dispute over a piece of lawn." A large knife and a lawnmower were allegedly used during the brawl and a 72-year-old man is speaking with police.
He was yet to be charged.