The mast would be located on the bridleway behind All Saints Church.
Residents have now formed the Grayswood Action Group to fight against the proposed 20-metre high mast.
The group has health, biological and setting concerns with the mast.
Jeanette Townsend, who is a member of the Grayswood Action Group, said: “The proposed mast site is in the Surrey Hills Area of Outstanding Natural Beauty. You will be able to see the mast from the village green – it is not in a secluded area.
“This is a very emotive subject in the village and tensions are running quite high at the moment.
In response, Waverley Borough Council (WBC) has insisted it had limited scope to turn down a prior approval application for the mast.
A WBC spokesperson said: “This was an application for prior approval for new telecommunications apparatus.
“The proposals did not require an application for express planning permission because the mast and associated equipment represents permitted development under the blanket permission granted by central government.
“The local planning authority was only allowed to consider matters of siting and appearance.
“While the fact the site lies in the AONB and the level of local opposition were noted and taken into account, having assessed the proposals against national and local planning policy and all other material considerations, officers ultimately concluded the proposed development would be acceptable in terms of both siting and appearance, and prior approval was given.
“The application was supported by a certificate confirming the installation will comply with the guidelines stipulated by the International Commission on Non-Ionizing Radiation Protection and it was, therefore, not necessary for the council to consider potential health impacts further.”
The Grayswood Action Group has put together an online petition against the proposed 5G EE mast.