City’s soft light, gas circulating in the centre (7)
I believe the answer is:
glasgow
'city's' is the definition.
(Glasgow is an example)
'soft light gas circulating in the centre' is the wordplay.
'soft light' becomes 'glow' (I've seen this in another clue).
'circulating' indicates an anagram.
'in the centre' indicates putting letters inside (some letters go in the middle of other letters).
'gas' is an anagram of 'asg'.
'glow' enclosing 'asg' is 'GLASGOW'.
(Other definitions for glasgow that I've seen before include "City of strangely low gags" , "European City of Culture, 1990" , "Scots city" , "Sauchiehall St. city" , "City of bad low gags" .)