The incident took place during the traditional march through the city's historic centre as part of annual Schützenfest celebrations, which feature a target shooting competition, and the crowning of the Schützenkönig who maintains the title until the following year.
The horse galloped several kilometres before it was caught, while the five people's injuries are not thought to be serious.
Among the participants in the 12 kilometre march was Lower Saxony's state premier, Stephan Weil. More than 100 music, folk and dance groups, as well as several floats took part in what organizers say is the world's largest marksmen's festival.
The festival, which runs until 7 July, is expected to attract 1.3 million visitors.