Ten more people were injured, some losing limbs, during the filming.
Omar Lafluf, the town's mayor, said the accident happened on Friday during a test of strength aimed at raising money for a hospital in Young, a town of 14,600 people about 300km northwest of Montevideo.
About 200 participants pulled a locomotive with a rope for a show called Challenge of the Heart.
One woman slipped on the wet ground, causing others around her to fall in the path of the locomotive which, while not running, had no brakes.
Police said several victims lost arms or legs.
About 3000 school children witnessed the accident.
Police, firefighters, medical teams and volunteers were on the scene to deal with the accident.
The local authorities declared three days of official mourning and closed schools.