Natural Resources Wales (NRW) said it wanted to ensure it did a "better job" next time Llanrwst faced flooding.
Some residents have complained a demountable dam was not raised early enough across the street to prevent nearby homes flooding on 26 December.
It was introduced as part of a Â£6.5m flood relief scheme across the area.
Officials, including NRW staff, met with residents to discuss concerns during a drop-in session on Thursday.
Llanrwst flood warden Sandra Holmes said: "Everybody is angry because all the areas that flooded or had sewerage problems, all of them could have been prevented.
"We've escaped before. The flood scheme does work and it has worked but it wasn't used."
The temporary flood barrier is kept in-situ and can be assembled in times of high flood risk.
Asked why the dam was not raised sooner, Tim Jones from NRW said: "The investigation will look into why it wasn't raised earlier, why the road wasn't closed at an earlier time.
"We need to find out what happened and why it happened and learn from that, so that next time we have a flood here we can do a better job."
An investigation has been launched amid claims a flood relief dam was not raised in time to help prevent homes from flooding in Conwy county.