Belgian city for example in tall tale (5)
I believe the answer is:
liege
'belgian city' is the definition.
(I've seen this before)
'example in tall tale' is the wordplay.
'example' becomes 'eg' (short for 'exempli gratia', 'for example' in Latin).
'in' is an insertion indicator.
'tall tale' becomes 'lie' (a tall tale is a lie or unbelievable story).
'eg' inserted into 'lie' is 'LIEGE'.
'for' is the link.
(Other definitions for liege that I've seen before include "World War one battle site" , "Belgian province" , "Loyal subject" , "Feudal (lord); vassal" , "Owing feudal allegiance" .)