The Gulls signed unattached Racchi, 27, and Yeovil Town's Allen, 22, on short-term deals on 1 February.
Amos Kabeya, Liam Prynn, Oneil Odofin and Exodus Geohaghon are also released.
But Torquay are in talks over new deals for Nathan Blissett, Dan Butler, Angus MacDonald, Courtney Richards, Aman Verma, Toby Ajala, Shaun Harrad, Sam Chaney, Luke Young, and Ben Gerring.
Torquay United have announced that midfielders Iffy Allen and Danny Racchi are to leave the National League club.