A spectator at a school fireworks display that went wrong said "shrapnel was flying everywhere" and hit "traumatised" children.
People were left screaming and running for safety after the explosions at Derwendeg Primary School in Hengoed, Caerphilly county, on Monday evening.
Gwent Police said it was called to the scene, but no injuries or damage were reported.
Witness Shaun O'Connor said fireworks flying into the crowd was "outrageous".
He added: "They had to stop the display because the shrapnel was flying everywhere."
He said one firework went into a house, another into a car and another into the spectators.
"It was traumatising for the children," he said.
"It was terrible, there was people grabbing their children, running away from the display."
Head teacher Lynsey Wangiel said the school was "incredibly upset" but added that the display had been run the same way for 20 years with a trained professional.
Caerphilly council said it was aware of the incident and a health and safety investigation would take place.