The category four tropical cyclone has been downgraded to a two as it moves through the Gulf of Carpentaria.
It is expected to impact the eastern Top End late on Saturday.
The Bureau of Meteorology has told residents from Nhulunbuy to Port McArthur, including Borroloola, Numbulwar, Alyangula and Gapuwiyak, Narelle will strengthen to a category three as it makes landfall north of Groote Eylandt.
About 500 Numbulwar locals have been evacuated to Darwin as a precaution, while residents in other areas are advised to shelter in place with an emergency plan.
Up to 200 millimetres of widespread heavy rain is forecast but bureau spokeswoman Shenagh Gamble said totals exceeding 300 millimetres were possible.
"I want to emphasise that with these rainfall amounts, we expect that that could fall in very intense rain periods," she said on Saturday.
"So those amounts could fall very quickly as a very locally intense shower or rain storm further inland."
Public shelters are opening for residents in communities in the cyclone's path whose homes are not suitable to remain in.
Residents sheltering at home should move to the smallest, strongest, most protective room in their house, such as a bathroom or a toilet.
"Take all members of your household, including pets, into that room with your emergency kit," NT Fire and Emergency Services Commissioner Andrew Warton said.
"We implore you, wherever you are in the impact of this cyclone, please do not venture outside. It's dangerous."
Ergon Energy crews were deployed to return power to 1150 blacked-out homes across Cape York on Saturday.
While initial reports of damage were not as bad as they could have been, Emergency Management Minister Kristy McBain warned the danger was not over.
"I urge everyone in the warning zone to prepare, enact their emergency plans if they haven't already done so, listen to local radio for updates and listen to the advice of local authorities," she said.
"If there is an emergency around you, please call triple zero and look out for vulnerable community members, including children and the elderly."
Very destructive winds gusting up to 195km/h are forecast in some areas into Sunday while heavy rain could cause flash flooding.
In an outback town where residents face the threat of a second round of major flooding, just as a big clean-up had hit full swing, sandbags are being stacked again.
Katherine has been shaking off the mud since suffering its worst floods in almost 30 years earlier in March.
Mayor Joanna Holden told AAP the town's population of 10,000 was taking the forecast seriously and preparations were under way, with sandbagging crews in action from Thursday.
Many properties that had water through them had been cleaned out but other clean-ups were on hold in case buildings flooded again.
The mayor was worried volunteers were becoming exhausted after two weeks of helping with the recovery.
"To have to go back again and potentially have to clean out the same places and see the same devastation, that takes its toll," she said.
