Police in Papua New Guinea have charged two people over a brutal sorcery killing in the country's Highlands.

The murder of Kepari Leniata earlier this month made headlines around the world.

The 20-year-old woman was tied up, stripped naked, doused in petrol and set alight on a main street in Mount Hagen, the third-largest city in Papua New Guinea.

Locals said her killers had accused her of using sorcery or black magic to kill a young boy.

Police arrested about 100 people at a squatter settlement last week and took them in for questioning.

A man and a woman have been charged with murder.

Local reports have identified the alleged killers as the mother and uncle of the young boy whose death sparked the murder of Leniata.

There is widespread belief in sorcery in the poverty-stricken Pacific nation, where many people do not accept natural causes as an explanation for misfortune, illness, accidents and death.

There have been several other cases of witchcraft and cannibalism in PNG in recent years.

In 2009, a young woman was stripped naked, gagged and burned alive at the stake, also in Mount Hagen, in what was said to be a sorcery-related crime.

ABC/AFP