I found this expression while subtitling an episode of The Dukes of Hazzard. It is meant to indicate that the best way to maintain cordial relationships with your neighbours is to make sure their space and yours are clearly demarcated. Boss Hogg uses it to warn gangsters from Atlanta who have come to the county of Hazzard that they’d better stay in their territory and he won’t meddle in theirs.
I had to find an equivalent, and I thought of "Chacun chez soi et les poules seront bien gardées" (literally, each in their home and the chickens will be well looked after). It doesn’t give exactly the same idea of demarcation and separation between two people living close by. It insists more on the idea that people should look after their own business, not that they must clearly delimit their space and other people’s.
However, I thought that it was still faithful to what Boss Hogg was trying to say and it seemed that for the general tone of that scene, it was important to keep an expression (rather than go for a litteral translation, which was an option here) to show that Boss Hogg is a down-to-earth kind of man.
Incidentally, this is also one of the preferred expressions used by Israeli Prime Minister Ariel Sharon to justify the barrier that Israel is building to cut itself off from the West Bank. Perhaps in this particular case, it’s more a matter of "bad fences make bad neighbours"?