The key issue as far as safety is how you handle the vapors that are given off when the alcohol evaporates out of the mix. That vapor is highly flamable.
IF you have VERY good ventilation, are very careful of sparks, open flames, etc, then it should be 'relatively' safe to do indoors. Ventilation is the key. You need to move that vapor away and preferably outside.
A lot of it has to do with how much you are doing at a time. If you're only reducing a few ounces of alcohol, then its not that big a deal unless you set the container on fire. On the other hand, if you are reducing liter at a time or more, then thats a lot of vapor that could potentially cause a serious explosion.
I used an electric skillet outside on the deck for the main reduction. After filtering through a coffee filter, I put the alcohol mix in a container in the skillet then add water to the skillet and turn it up till it boils the water. Then wait for the alcohol to evaporate. You will need to top off the skillet every 1/2 hour or so with more water.
Once most of the alcohol is gone, you could finish inside relatively safely - which is what I did.