DD had a big party last year, when she was 4 (about 25 in all) AND grandparents were there.
Reason for size? Why not? We invited nursery and "out of nursery" friends, and siblings were able to join in. Parebts stayed and we provided drinks and cakes for them.
Grandparents were there to celebrate her birthday with her as well, as we auntie and uncle, and god parents (each with children of theor own). Why should grandparents not be invited? They all helped out with making teas and coffees and handing them out. My sister did all the baking. They helped tidy up afterwards too.
Next year will be a big one too probably . They'll be all the class - 14 (excl DD), her out of school friends and then some little ones (godparents child, cousin, etc.) So will be 20+ again.
All good fun as well!
(No sparkly tops - well not for the grown ups anyway)