Military action, for example, close to castle is set up (5)
I believe the answer is:
siege
'military action' is the definition.
(siege is a kind of military action)
'example close to castle is set up' is the wordplay.
'example' becomes 'eg' (short for 'exempli gratia', 'for example' in Latin).
'close to' indicates one should take the final letters (the close of something is the end).
'set up' says the letters should be written backwards (in a down clue, letters go up).
The last letter of 'castle' is 'e'.
'eg'+'e'+'is'='egeis'
'egeis' backwards is 'SIEGE'.
'for' acts as a link.
(Other definitions for siege that I've seen before include "Offensive encirclement" , "Blockade of a town or fortress" , "Persistent attempt to gain" , "Operation to surround a town/fortress" , "Blockade of a fortified place" .)