Proof with binomial theorem:
$(a^2+h)^{1/2} \approx a+\frac{h}{2a}$ for $0<h<a^2$
Solution:
$(a^2+h)^{1/2} = a(1+\frac{h}{a^2})^{1/2}$
I think there must be an additional step between the last and second last step? But which one?
How do I proof that it's only value for for $0<h<a^2$?

We ignore higher order terms, i.e. terms where power of $h$ is at least $2$.
The approximation is better the smaller $\frac{h}{a^2}$ is.