Andrew Coleman, for the prosecution, said Eleanor Brewer's family was blamed by the woman next door, Linda Rosenberg, for the disappearance of her dog.
They had been neighbours for six years but in June last year the Brewers were playing music and watching videos at home with friends 'when there was an awful thud in the back of the fireplace and a horrible smell'.
Mrs Brewer told the jury: 'Behind the gas fire were rotting entrails of chickens and turkeys, cockroaches and maggots. It took two hours to clear up. There must have been 30-40 kilos in the sack. It was revolting.
'I have never smelt a dead body but that is what I imagine one would smell like. I was actually physically sick. I went to the front door to get some fresh air.'
She said she had heard Mrs Rosenberg on the telephone saying: 'Whatever it takes, this bastard has to go.'
Mrs Rosenberg threatened to kill Mrs Brewer's husband, Alan, and her sons aged 14 and five and daughters aged 13 and nine, Mr Coleman said. She then appeared at their door carrying a replica gun - causing Mrs Brewer to barricade herself and children into a bedroom behind a wardrobe.
'I was terrified - I thought we were going to be shot,' Mrs Brewer said.
Mrs Rosenberg, 49, of Melbury Gardens, West Wimbledon, south- west London, denies making threats to kill, affray and possessing an imitation gun.
Mr Coleman said it was not necessary to prove that Mrs Rosenberg actually intended to kill but that she intended her threat to be taken seriously.
The trial continues today.Reuse content