Actor, local character in Athens that's funny (8)
I believe the answer is:
thespian
'actor' is the definition.
(I know that actor can be written as thespian)
'local character in athens that's funny' is the wordplay.
'local character' becomes 'pi' (pi is a kind of letter of the alphabet. I am not sure about the 'local' bit.).
'in' is an insertion indicator.
'that's funny' is an anagram indicator.
'athens' anagrammed gives 'thesan'.
'pi' inserted within 'thesan' is 'THESPIAN'.
Can you help me to learn more?
(Other definitions for thespian that I've seen before include "person in the acting business" , "Player" , "stage performer" , "Actor; relating to drama" , "Actor - neat hips (anag)" .)