The wall, on Main Street, North Newington collapsed two years ago and was temporarily cordoned off by some metal grills, secured with string.
Now, after attempts to have the problem rectified by the parish council and villagers failed, the wall is 'bulging' and water is draining through on to the highway.
"The wall is starting to bulge and I can see new cracks that weren't there last week. It's going to collapse very soon and it might cause a road accident," said one resident.
"There are rocks resting against the barricade that weren't there last week. Water is continuously pouring over the wall near the bit that collapsed over a year ago. The water is freezing and causing a huge potential for an accident. We noticed that the wall is bulging outwards and looks like it's about collapse - somebody could get hurt."
Another villager expressed fears that the road could become like 'an ice rink' when water freezes. The pavement is used by parents to drop off children to the primary school and neighbours watching them feel they are at unnecessary risk.
The structure is a retaining wall for a patch of land that was once allotment gardens. An application for planning consent to build a house there is currently 'under consultation' at Cherwell District Council' s planning department.
Oxfordshire County Council, responding to a request for action on 'Fix My Street', said it had no more powers of enforcement with regard to the matter. They said it was up to Cherwell District Council's enforcement department to take action if it felt the wall was in imminent danger of collapse.
A spokesman for Cherwell District Council said: “Cherwell District Council will continue to monitor the condition of the wall and is ready to take formal action against its owner if and when this becomes necessary.”