Dance to records in princess's company (5)
I believe the answer is:
disco
'dance' is the definition.
(disco can mean a dance event)
'princess's company' is the wordplay.
'princess's' becomes 'Di's' (Princess Diana).
'company' becomes 'co' (abbreviation).
'dis'+'co'='DISCO'
'to records in' acts as a link.
I am not very happy about this link. Some or all of it may belong to another bit of the clue.
Can you help me to learn more?
(Other definitions for disco that I've seen before include "Party with music" , "Doc is dancing here" , "One might get down to this" , "Public dance hall with recorded music" , "Demonic spirit" .)