City diner hosting retirement of current medic (7)
I believe the answer is:
cardiff
'city' is the definition.
(Cardiff is an example)
'diner hosting retirement of current medic' is the wordplay.
'diner' becomes 'caff' (caff or cafe is a type of eatery).
'hosting' means one lot of letters goes inside another (inserted letters are welcomed in or hosted).
'retirement of' says the letters should be written in reverse.
'current' becomes 'I' (symbol for electric current).
'medic' becomes 'dr' (abbreviation for doctor).
'i'+'dr'='idr'
'idr' backwards is 'rdi'.
'caff' going around 'rdi' is 'CARDIFF'.
(Other definitions for cardiff that I've seen before include "Capital on the Taff" , "Capital of Wales" , "Place in Wales" , "City on the Taff" , "Welsh city" .)