A woman in the remote town of Baga. (www.hrw.org)
The rights group said soldiers "engaged more in destruction than in protection" following an attack by Boko Haram fighters on a military patrol, with 37 people killed.
Boko Haram has been waging an insurgency since 2010, in an attempt to form an Islamic state.
HumanIPO reported in February on the kidnap of seven French citizens by Boko Haram, who were then paraded on YouTube. They have since been released.
The militant group has also fought a concerted war against the Nigerian telecoms sector, with minister for communications Omobola Johnson in October blaming the slack performance of the sector on the group’s impact.
It was reported in September attacks by Boko Haram had cost operators close to NGN20 billion (US$127 million).
Human Rights Watch said it had analysed satellite images which undermined the Nigerian military’s claim only 30 houses were destroyed during the fighting, and called on the authorities to investigate and prosecute those involved.
"The Nigerian military has a duty to protect itself and the population from Boko Haram attacks, but the evidence indicates that it engaged more in destruction than in protection," said Daniel Bekele, Africa director at Human Rights Watch, in a statement.
President Goodluck Jonathan's office said Nigeria's Human Rights Commission (HRC) would investigate the allegations.
