"Estamos en el patio."
Translation:We are on the patio.
But "in the backyard" totally fits. We wouldn't say we are "on the backyard." The word patio has more than one meaning and for this sentence, "backyard" fits much better than "patio." The definitions for the Spanish word "patio" include both patio and backyard, as well as some others like courtyard..
I would say a yard or backyard is in spanish a patio, which would be surrounded by walls with a brick floor. A garden is un jardín with a floor of earth with grass and plants. But I´m not sure of this, so please native english ánd native spanish speakers: clearify!
From a native US English perspective: generally a yard refers to the grass covered portion of a property in most climates (backyard behind the proton behind the house). A garden would be an area within a yard planted with flowers or for growing vegetables. A patio would be an area with a brick floor, walls are optional. How this all translates into Spanish is still a mystery to me!