The residents chased him to a neighbouring field, where he allegedly swung the tomahawk at one of them.
When he realised he was unable to escape, he ran back to the house.
The residents managed to disarm him and hold all three alleged offenders until police arrived.
Riverton Police Senior Constable Kelvin Templeton said officers found "a significant amount" of stolen property in the burglars' vehicle.
Further enquiries revealed the group had committed other burglaries in Tuatapere and Colac Bay. The trio have been charged with multiple counts of burglary.
Templeton said the police wanted to thank the Colac Bay residents' for their "brave and selfless" actions, but asked anyone who witnessed a crime to phone police rather risk their own safety.
Tips for keeping your home secure:
• Lock all doors, garages and ensure windows are shut securely before you leave the house
• Keep spare keys with neighbours, instead of under a door mat or in a pot plant
• Put tools and ladders in a safe place
• Never leave a note on the door saying you're out
Before going away on holiday ask your neighbours to:
• Collect mail
• Open and close windows
• Park a car in your driveway
• Report any suspicious behaviour to police