Ama Hemmah was allegedly tortured into confessing she was a witch, doused in kerosene and set alight. She suffered horrific burns and died the following day.
Belief in witchcraft is relatively common in Ghana but there was widespread revulsion at the killing.
Three women and two men have been arrested. They are Nancy Nana Ama Akrofie, 46, photographer Samuel Ghunney, 50, Emelia Opoku, 37, Mary Sagoe, 52, and pastor Samuel Fletcher Sagoe, 55.
The suspects say the death was an accident and deny committing any crime. They claim they were trying to exorcise an evil spirit from the woman by rubbing anointing oil on her but it accidentally caught fire.
Augustine Gyening, assistant police commissioner, told the Daily Graphic that Sagoe saw Hemmah sitting in his sister's bedroom on 20 November and raised an alarm, attracting the attention of people in the neighbourhood.
Gyening added that the suspects claimed Hemmah was a known witch and subjected her to severe torture, compelling her to confess. He said Ghunney then asked Opoku for a gallon of kerosene and with the help of his accomplices poured it over the victim and set her ablaze.
A student nurse, Deborah Pearl Adumoah, came to Hemmah's rescue and sent her to Tema General hospital, but she died within 24 hours from severe burns.
Hemmah's son, Stephen Yeboah, 48, told the Daily Graphic: "Our mother was never a witch and had never suffered any mental disorder throughout her life, apart from exhibiting signs of forgetfulness and other symptoms of old age."
Newspaper pictures showing the woman's injuries have caused anger in Ghana. The incident has been condemned by human rights and women's activists.
Comfort Akosua Edu, of the country's Commission on Human Rights and Administrative Justice, said: "The commission finds the action of the perpetrators of this atrocious crime as very barbaric and one that greatly dims the nation's human rights record.
"That they came and met her in their room does not in any way warrant branding her as a notorious witch who deserved to be subjected to such an ordeal."
She added: "It is very disheartening that some men of God, whose responsibility it is to help save lives, could orchestrate the killing of innocent souls, all in the name of God."