California sailors gathering island's stones (5)
I believe the answer is:
cairn
'stones' is the definition.
(I've seen this before)
'california sailors gathering island's' is the wordplay.
'california' becomes 'ca' (abbreviation).
'sailors' becomes 'RN' (abbreviation for Royal Navy).
'gathering' indicates putting letters inside (gather can mean to acquire or bring in).
'island' becomes 'i' (geographical abbreviation).
'ca'+'rn'='carn'
'carn' enclosing 'i' is 'CAIRN'.
(Other definitions for cairn that I've seen before include "Pile of stones - type of terrier" , "Stone-pile monument" , "Man" , "Agree" , "Heap of stones - terrier" .)