Drinking song about the States (8)
I believe the answer is:
carousal
'drinking' is the definition.
(a drunken feast)
'song about the states' is the wordplay.
'song' becomes 'carol' (carol is a kind of song).
'about' means one lot of letters goes inside another.
'the states' becomes 'usa' (I've seen this before).
'carol' enclosing 'usa' is 'CAROUSAL'.
(Other definitions for carousal that I've seen before include "Revels" , "Merry drinking party" , "Lively drinking party" , "A drink-and-be-merry session" , "Merry drinking spree" .)