At a place, a watch-tower (7)

I believe the answer is:

atalaya

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'watch-tower' is the definition.
I can't tell whether this defines the answer.

'at a place a' is the wordplay.
'place' becomes 'lay' (laying is a kind of placing).
'at'+'a'+'lay'+'a'='ATALAYA'

Can you help me to learn more?

(Another definition for atalaya that I've seen is " watchtower".)

I've seen this clue in the Sydney Morning Herald.

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