Derelict outskirts of township keep sheep (5)
I believe the answer is:
tramp
'derelict' is the definition.
(I've seen this before)
'outskirts of township keep sheep' is the wordplay.
'outskirts of' says to hollow out the word (remove centre letters) (only letters on the outskirts).
'keep' means one lot of letters goes inside another.
'sheep' becomes 'ram' (male sheep).
'township' with its centre removed is 'tp'.
'tp' placed around 'ram' is 'TRAMP'.
(Other definitions for tramp that I've seen before include "cargo-boat" , "man down on his luck" , "Ship, possibly" , "Walk with heavy steps like hobo" , "March heavily like hobo" .)