Residents fled Ishakani village on the Lamu-Somalia border after al Shabaab militants attacked early Sunday morning.
The entire village has been deserted, with residents putting up in makeshift camps in Kiunga area.
The militants are said to have told the villagers to stop cooperating with the government or face consequences.
They brought down the Kenyan flag at a former Kenya Defence Forces mini-camp and erected theirs. There are no security camps in Ishakani.
The raid came hours after al Shabaab ambushed a security convoy, killing a civilian woman and injuring five police officers at Nyongoro area along Lamu- Garsen highway.
Two police vehicles were torched during the attack. Boni Enclave Campaign director Joseph Kanyiri earlier said sufficient measures were taken to find and eliminate the attackers and ensure safety.
County leaders have condoled with the families of those attacked in Lamu on Saturday.
Senator Anwar Loitiptip and Lamu West MP Stanley Muthama condemned the attack and called on the government to strategise on how to protect travelers.
Loitiptip asked leaders in the county to join hands and push for reforms where security is concerned.
“I encourage people to always share information with our security agencies. As county leaders, we need to come together and push as hard as we can for reforms that will ensure the security of this region improves," he said. "This is so that our people won't be scared to travel and so they won't die anymore because of terrorists."
In his statement, Muthama said more must be done for Kenya to win the war against al Shabaab.
“It pains me when we look so helpless in the hands of terrorists. Our officers and citizens have suffered on our roads. I call on the people of Lamu West to be calm and cooperate with security agencies in ensuring the war on al Shabaab is successful," he said.
"I trust that the government will do something to bring all this to a stop. No more people should die in the hands of al Shabaab."
The legislators also asked the government to put up communication masts in terror hot spots so police can be alerted as soon as attacks take place. They also want the road tarmacked to enable faster movement of vehicles.