Egyptian town or state in a poor state (7)
I believe the answer is:
rosetta
'egyptian town' is the definition.
The definition suggests a singular noun which matches the answer.
'state in a poor state' is the wordplay.
'state in' becomes 'ro' (I can't justify this - if you can you should give a lot more credence to this answer).
'a poor' is an anagram indicator.
'state' with letters rearranged gives 'setta'.
'ro'+'setta'='ROSETTA'
'or' is the link.
Can you help me to learn more?
(Other definitions for rosetta that I've seen before include "Stone providing key to deciphering Egyptian texts" , "Tablet that was the key to deciphering Egyptian hieroglyphs" , "Place stone key to Egyptian studies was found" , "Place associated with stone Champollion deciphered" , "Source of revelatory stone" .)