Ace air cadets, possibly circling island and body of water (8,3)
I believe the answer is:
adriatic sea
'body of water' is the definition.
(Adriatic Sea is an example)
'ace air cadets possibly circling island' is the wordplay.
'ace' becomes 'a' (abbreviation).
'possibly' indicates an anagram.
'circling' means one lot of letters goes inside another (circling can mean going around or containing).
'island' becomes 'i' (geographical abbreviation).
'a'+'air'+'cadets'='aaircadets'
'aaircadets' with letters rearranged gives 'adriatcsea'.
'adriatcsea' enclosing 'i' is 'ADRIATIC SEA'.
'and' is the link.
(Other definitions for adriatic sea that I've seen before include "Greek resort area" , "large body of water" , "It lies between Italy and the Balkan peninsula" , "It lies between Italy and the Balkans" , "Water between the Balkans and Italy" .)