The announcement, which said local residents would be barred from attending the funeral inside Mandela's house for safety and security reasons, stirred anger among residents of his boyhood town of Qunu, where he will be buried, the Wall Street Journal reported.
Officials said they also would comply with a request by Mandela's family that actual burial be private as well.
"This great icon was a people's person, but unfortunately we have to manage the numbers," government spokeswoman Phumla Williams said, adding that police wanted to avoid risks of a stampede.
"People aren't happy. They feel excluded," Mawande Ntantiso told the Journal. "They should allow people access; everyone here is invited to funerals."
South African President Jacob Zuma said he authorized 11,894 members of the South African National Defense Force for Mandela's funeral.
Mandela was born in the Eastern Cape province village of Mvezo but moved to Qunu when he was young. After his release from prison, he built a home along the road that bisects Qunu.
Many of Mandela's family members arrived in the village Wednesday and Thursday, but his grandson, Mandla Mandela, will accompany Mandela's body when it is returned to Qunu Saturday, the Journal said. The family will conduct a traditional ceremony Saturday before Sunday's state funeral.
The 4,500 people invited to attend the funeral include family members, South Africa President Jacob Zuma and dignitaries, including Britain's Prince Charles and several African presidents, the government said.
The South African government also said Friday it couldn't guarantee everyone waiting in line to view Mandela's body lying in state at the Unions Building in Pretoria would be able to pay their respects before the body is taken to his home province for burial.
"We appeal to members of the public who have not had the opportunity to pay their respects to President Mandela at the Union Buildings," a government statement said, "to say goodbye in their own personal way."