Crossword Genius

Country settled with a laugh about university bird (9)

Ross

I believe the answer is:

lithuania

I'm a little stuck... Click here to teach me more about this clue!

'country' is the definition.
(I've seen this before)

'settled with a laugh about university bird' is the wordplay.
I cannot really understand how this works, but
'settled' could be 'lit' (I've seen this before) and 'lit' is found within the answer.
'a' could be 'an' and 'an' is found in the answer.
'about' could be 'a' (abbreviation in Chambers) and 'a' is found within the answer.
'university' could be 'u' (abbreviation for university) and 'u' is present in the answer.
The remaining letters 'hi' is a valid word which might be clued in a way I don't understand.
This explanation may well be incorrect...

Can you help me to learn more?

(Other definitions for lithuania that I've seen before include "land" , "Baltic country" , "on the Baltic front" , "Northeast European country" , "European country, capital Vilnius" .)

I've seen this clue in the Sydney Morning Herald.
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