Is it permitted to eat in a fenced in backyard on Shabbos and Yom Tov?
This is allowed; however, the following should be kept in mind:
1. You should preferably light the candles on the table where you are eating. If this is not practical, you can light inside but someone should eat something (a snack) near the candles while they are burning. It is still better to have 2 candles on the actual table where you are eating.
2. Kiddush needs to be at the place of the meal. One cannot make kiddush in the house and then eat in the yard, or vice-versa, even if they had this in mind.
3. Watering plants is forbidden. great care must be taken not to spill any water on the grass, especially while washing hands (also mayim achronim). one should be careful even with other liquids. For this reason the Alter Rebbe writes that its best not to eat on grass if water will be handled (it seems that this only applies if real water will be used).
4. One may not pour liquid on soft earth.
5. You should also make sure an eiruv chatziros was done, if needed.
Sources:
1. For more information see here:
What is our custom regarding the placement of the Shabbos candles
2. שו”ע אדה”ז רעג, ב
3. שם שלו, ט
4. שם שכא, טז. בדה”ש קמג סקי”ח
#8923