Commissioner Fitzsimmons said catastrophic fire ratings had been issued only once before in NSW - in 2013 - since national standardised ratings were introduced in 2009.
Residents of the town were told to take shelter as it was too late to leave.
While bush fires are common in Australia's arid summer, climate change has pushed up land and sea temperatures and led to more extremely hot days and severe fire seasons. The RFS said there were unconfirmed reports of a house lost in the fire.
As the RFS chief spoke, 49 fires were burning across NSW, 17 of them uncontained.
Three people have been arrested accused of lighting fires during the total fire ban - a 32-year-old man in Nabiac, a 40-year-old man on the central coast and a 13-year-old boy near Orange.
"Homes are not created to withstand fires in these conditions and may not offer safety".
Emergency alert telephone messages were being sent to people in the area.
The Golden Highway has been closed due to smoke and is expected to remain closed for the remainder of Sunday.
The RFS said conditions in the area of that blaze eased overnight and reduced the level of fire activity, but that firefighters were still actively defending properties under threat.
FIRE RACING: The RFS warned stong winds in the region would enable the fire in the Leadville to spread quickly.
Mr Fitzsimmons earlier warned conditions in some parts of the state might be worse than those that preceded the Black Saturday fires.
Emergency warnings remained in place for blazes near Mudgee and Dondingalong on Sunday night - as out-of-control fires near Boggabri, Port Macquarie and Dunedoo have since been downgraded.
"We're talking indices tomorrow up over 150, 160, which is quite extraordinary", he said.
Mr Osborne said the zone had 145 vehicles and could call on Fire and Rescue NSW assistance.
Further north, firefighters were battling several large blazes between Bulahdelah and Gloucester, including a 1700 hectare bushfire at Howes Creek that was burning in an easterly direction in strong winds.