In this study, we carried out an investigation of the etching characteristics (etch rate, selectivity to $SiO_2$) of ZnO thin films in $N_2/Cl_2$/Ar inductivity coupled plasma. A maximum etch rate and selectivity of 108.8 nm/min and, 3.21, respectively, was obtained for ZnO thin film at a $N_2/Cl_2$/Ar gas mixing ratio of 15:16:4 sccm. The plasmas were characterized by optical emission spectroscopy. The x-ray photoelectron spectroscopy analysis showed the efficient destruction of oxide bonds by ion bombardment. An accumulation of low volatile reaction products on the etched surface was also shown. Based on this data, an ion-assisted chemical reaction is proposed as the main etch mechanism for plasmas containing $Cl_2$.