Ducks circling small lake in city (4)
I believe the answer is:
oslo
'city' is the definition.
(Oslo is an example)
'ducks circling small lake' is the wordplay.
'ducks' becomes 'oo' (I've seen this in other clues).
'circling' indicates putting letters inside (circling can mean going around or containing).
'small' becomes 's' (abbreviation - e.g. clothes size).
'lake' becomes 'l'.
's'+'l'='sl'
'oo' going around 'sl' is 'OSLO'.
'in' is the link.
(Other definitions for oslo that I've seen before include "Capital of Norway" , "Capital often frozen" , "Northern city" , "Scandinavian city" , "foreign port" .)