Country's troops in retreat -- madness! (7)
I believe the answer is:
romania
'country's' is the definition.
(Romania is an example)
'troops in retreat madness' is the wordplay.
'troops' becomes 'or' (military abbreviation for other ranks).
'in retreat' says the letters should be written in reverse.
'madness' becomes 'mania' (I've seen this before).
'or' back-to-front is 'ro'.
'ro'+'mania'='ROMANIA'
(Other definitions for romania that I've seen before include "EU country" , "Oman air in the eastern European state" , "Country in SE Europe" , "Eastern European country" , "Country of eastern Europe" .)