A northern girl crossing river in mountainous principality (7)
I believe the answer is:
andorra
'mountainous principality' is the definition.
(Principality of Andorra is a European state)
'a northern girl crossing river' is the wordplay.
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'girl' becomes 'dora' ().
'crossing' indicates putting letters inside.
'river' becomes 'r'.
'dora' enclosing 'r' is 'dorra'.
'a'+'n'+'dorra'='ANDORRA'
'in' is the link.
(Other definitions for andorra that I've seen before include "Small republic in the eastern Pyrenees" , "Tiny European nation" , "part of Europe" , "Small European country" , "Country between France and Spain" .)