Eccentric imprisons neighbourhood extremists in capital (6)
I believe the answer is:
london
'capital' is the definition.
(London is an example)
'eccentric imprisons neighbourhood extremists' is the wordplay.
'eccentric' becomes 'loon'.
'imprisons' indicates putting letters inside.
'extremists' means to remove the middle letters.
'neighbourhood' with its centre taken out is 'nd'.
'loon' enclosing 'nd' is 'LONDON'.
'in' is the link.
(Other definitions for london that I've seen before include "US writer" , "source of this paper" , "City for the odd non-old" , "- Clay; - pride; - plane" , "UK's capital" .)