Backyard Terrasse

My backyard terrasse consists of an elevated land measuring appr. 8x20ft and has 24x24" ciment blocks covering the elevated land. Over the years, the elevated land has decreased in height, sloping away from the house, causing an uneven surface and bigger gaps between the blocks. At the perimeter of the terrasse, the land has a medium slope (~60 deg). The front part is covered with natural stones/ciment mortar and sides with grass. Right after the slope ends after 2 ft, my land meets with that of my neighbors.

I am planning to renovate so that I can make more use of the land that I have, but I am worried that if I install a retaining wall , it will move away from the house over time. What would you recommend? How close to the perimeter of my neighbors' yards can I install the retaining wall?