A panic whipped up by municipal powerlessness (10)
I believe the answer is:
incapacity
'powerlessness' is the definition.
(I've seen this before)
'a panic whipped up by municipal' is the wordplay.
'whipped up' indicates an anagram.
'by municipal' becomes 'city' (I can't justify this - if you can you should give a lot more credence to this answer).
'a'+'panic'='apanic'
'apanic' is an anagram of 'incapa'.
'incapa'+'city'='INCAPACITY'
Can you help me to learn more?
(Other definitions for incapacity that I've seen before include "Lack of required skills" , "Helplessness" , "Disability" , "Lack of power or ability" , "Powerlessness" .)