Aunt is travelling around island nation (7)
I believe the answer is:
tunisia
'nation' is the definition.
(Tunisia is an example)
'aunt is travelling around island' is the wordplay.
'travelling' is an anagram indicator.
'around' is an insertion indicator.
'island' becomes 'i' (geographical abbreviation).
'aunt'+'is'='auntis'
'auntis' anagrammed gives 'tunisa'.
'tunisa' going around 'i' is 'TUNISIA'.
(Other definitions for tunisia that I've seen before include "African state" , "N African country in which ancient Carthage lies" , "North African republic" , "As Inuit visits there in North Africa" , "country-style" .)