At a public meeting the villagers formed an action committee which will be considering various forms of protest.
The corporation's idea, now being considered by the Welsh Office, is to include Henllys in large expansion of the town to provide 2,300 more houses, one half private the other rented.
The villagers plan to draw up a petition in various parts of Cwmbran and seek a meeting with MP Mr John Stradling Thomas.
And if they can collect enough funds, their action committee may also seek legal advice.
Parish council chairman Councillor David Williams told the meeting that in similar cases an action group had hired a lawyer to conduct their case.
Councillor Fred Richards Henllys parish member on Magor and St Mellons rural council, told the meeting that the council were due to discuss the corporation's plans at their monthly meeting but he would try to put them on an earlier agenda if possible.
He said the unemployed already in Cwmbran should be founds jobs first before more houses were built for even more people.
The meeting threatened to divide at one stage when landowners were asked whether they would sell land to the corporation.
The committee vice-chairman Mr John Cantelo asked if the villagers were prepared to oppose any development or whether the landowners would sell at the right price.
The land which the corporation would buy is in the hands of a few people, who assured the meeting that they would not sell at agricultural land price and would oppose the corporation plan.
The corporation says it is their policy to encourage employment opportunities within the town, and have built a number of small speculative factories for immediate use by new industries.
They have already offered housing assistance to workers from industries outside the designated area. Their report on the draft plan adds: "At the present time any potential Cwmbran may or may not have for growth is severely hampered by the lack of land available for housing and industrial projects"