DUP councillor Ruth Patterson has been charged by police over comments she made on Facebook about a planned republican parade in Castlederg, Co Tyrone.
The former Belfast City deputy lord mayor has been charged with sending a grossly offensive communication.
Me Patterson, 57, responded to a fictional news post on Facebook which reported that an indiscriminate gun and bomb attack had taken place in Castlederg, with a number of senior Sinn Fein members said to be among those killed.
She wrote: "Who cares how we would be judged, we would have done a great service to Northern Ireland and the world..."
She added: "Would I shed a tear? No. Would I loose (sic) a night's sleep? No, would I really worry about what anyone else thought? No."
She later issued an apology and her post has been deleted from Facebook.
Ms Patterson is due to appear at Belfast Magistrates Court on August 22. She was arrested yesterday morning and released from Musgrave police station at around 10.25pm last night.
A crowd of around 30 supporters had gathered at the police station while she was being questioned.
The DUP released a statement criticising the arrest.
The statement said: "We fail to understand why the police chose to conduct a sensationalist arrest rather than contact Ruth and ask her to attend an Article 10 voluntary interview."
The party, which has been critical of the parade, launched an investigation into the intervention of Ms Patterson, branding her comments "completely unacceptable".
The DUP said they would raise the arrest with PSNI Chief Constable Matt Baggott.
A PSNI statement said: "When a report is made to the PSNI regarding information posted on social media sites, officers will investigate and where a criminal offence has occurred, appropriate action will be taken."
While the Parades Commission has imposed route restrictions on the Castelderg parade, loyalists have called on Secretary of State Theresa Villiers to ban the march. Republicans had earlier voluntarily rerouted it from part of Castlederg.