Dancing girl has an earthly paradise (7-2)
I believe the answer is:
shangri-la
'earthly paradise' is the definition.
(I've seen this before)
'dancing girl has an' is the wordplay.
'dancing' is an anagram indicator.
'girl'+'has'+'an'='girlhasan'
'girlhasan' is an anagram of 'SHANGRI-LA'.
(Other definitions for shangri-la that I've seen before include "Earthly paradise (from Hilton's "Lost Horizon")" , "Tibetan paradise created by James Hilton in novel 'Lost Horizon'" , "Milk" , "Imaginary paradise on earth" , "ideal place to live" .)