More than 1,000 residents of Boluo county, in the southern province of Guangdong, demonstrated against the construction of the planned facility, fearful that it could damage the environment and be bad for health, the newspaper said on Monday.
Some of the protesters "disturbed social order" and "caused heavy traffic jams", the newspaper quoted police as saying.
Police would deal leniently with law-breakers who surrendered themselves or informed against others within three days, it said. Eight of those detained were later released.
"The protest was organised by a handful of lawless people and participated in by people who did not know the truth," the newspaper quoted a statement by police in the area as saying.
Choking smog blankets many Chinese cities and the environmental degradation resulting from the country's breakneck economic growth has angered its increasingly well-educated and affluent population.
"We fear construction of a garbage incinerating plant will damage the environment and harm people's health," the newspaper quoted a resident of Boluo, within the city of Huizhou, as saying.
It quoted authorities as saying a site for the incinerator had not yet been picked.
On Sunday, government officials met about 30 residents of the area to discuss the project and hear their opinions and suggestions, the official Xinhua news agency reported.
About 90,000 "mass incidents" - a euphemism for protests - occur each year in China, triggered by corruption, pollution, illegal land grabs and other grievances.
In May, demonstrators in eastern China clashed with police at a similar rally against plans to build a garbage incinerator.
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