Belfast Magistrates' Court heard Samuel Stewart was so drunk he could barely stand when the row flared at the victims' home in Co Antrim.
The 58-year-old later told police he only armed himself with the hatchet as a deterrent because he did not know who would be in the house.
Stewart, of The Plains in Doagh, Ballyclare admitted three counts of common assault and possession of an offensive weapon in public.
He was arrested after going to his neighbours' house in July last year.
Defence counsel Michael Boyd told the court the incident, while completely out of character, was the culmination of a period of tension.
"He can barely remember what happened," the barrister said. "It can't have been very pleasant to open the door and see someone standing there with a hatchet in their hand.
"But he was so intoxicated he could hardly stand."
The three assault charges, against two men and a woman, related to fear of being attacked rather than any actual physical violence.
District Judge Fiona Bagnall was told Stewart had lost his temper amid attempts to get a parked car moved.
It was revealed that Stewart is planning to move home within the next month.
Judge Bagnall imposed four months imprisonment for possession of the hatchet, and a concurrent three-month term for the assaults.
All of the sentences were suspended for 18 months.