The below batch class will be processing a little over 2.5 million records. The START method will be sending in the whole 2.5 million records to the execute method and the execute method does the processing on each of the 2.5 million records inside a for loop. 
Also the for loop has a SOQL inside which I believe cannot be avoided to get the right numbers. 
Is this the right way of doing this or are there any other better ways. Please help!

Also when the running the below batch class I get the First Error: Too many query rows error.
 

global class MDUSquadRawDataBatchTest implements Database.Batchable<sObject>, Database.Stateful {  
    List<Address_Master__c> addressList = new List<Address_Master__c>();
    Set<String> addresses = new Set<String>();
   
    // Start Method
    global Database.QueryLocator start(Database.BatchableContext BC) {
        return Database.getQueryLocator('SELECT Street_Address__c,City_Name__c FROM MDU_Squad_Raw_Data__c');
    }   
    
    // Execute method
    global void execute(Database.BatchableContext BC, List<MDU_Squad_Raw_Data__c> rawData) {        
        for(MDU_Squad_Raw_Data__c mduRawData: rawData) {
            List<MDU_Squad_Raw_Data__c> addressData = [SELECT Street_Address__c,City_Name__c,Province_Code__c,Postal_Code__c,Internet_Service__c,Video_Service__c,Phone_Service__c FROM MDU_Squad_Raw_Data__c WHERE Street_Address__c=:mduRawData.Street_Address__c AND City_Name__c=:mduRawData.City_Name__c];
            String fullAddress = addressData[0].Street_Address__c+' '+addressData[0].City_Name__c+' '+addressData[0].Province_Code__c+' '+addressData[0].Postal_Code__c;
            
            Address_Master__c theAddress = new Address_Master__c();
            if(!addresses.contains(fullAddress.substringBeforeLast(' '))) {
                theAddress.Name = addressData[0].Street_Address__c;
                theAddress.City_Name__c = addressData[0].City_Name__c;
                theAddress.Province_Code__c = addressData[0].Province_Code__c;
                theAddress.Postal_Code__c = addressData[0].Postal_Code__c; 
                fullAddress = addressData[0].Street_Address__c+' '+addressData[0].City_Name__c+' '+addressData[0].Province_Code__c+' '+addressData[0].Postal_Code__c;
                theAddress.Full_Address_Ext_Id__c = fullAddress;

                addresses.add(fullAddress.substringBeforeLast(' '));
                addressList.add(theAddress); 
            }                                                     
        }            
        Database.Upsert(addressList, Address_Master__c.Fields.Full_Address_Ext_Id__c, true);
    }
    // Finish Method    
    global void finish(Database.BatchableContext BC) {
        
    } 
}

I request if someone could please help me with this, as I am dealing with this for some time, with no idea on how to fix this.