Get a lot bigger than you want, ie a 30x20 if you only want to build on a 20x20. Fence off the detonation zone. You don't really need to, but you can lock the gate then, and keep stray sims from wandering into it.
Next, get the Fireproof Homestead Lifetime Reward. Accidents happen, and this one will keep your house from burning down when it does.
Think I will put together an inventor to test detonation blast radii. Good safety info, that.
-Update-
With the test run, my result is that I hate detonating items. I put together a 10x10 test grid, target item in the center, and a line of equally detonatable items in each of the 8 directions from it. In two of the directions, it left the outer most 4 items untouched, and in a 3rd direction it left the 3rd from the end untouched and took out the rest in that line. Nothing outside the test grid though, so I think a 5 tile radius from the target item is the limit. This was done with one of those squid things with the smaller footprint though, and I want to bet that the bigger items bring a bigger radius. Seems chaotic as to whether it will even destroy an item though.