Fancy that American who serves royal favourite (5)
I believe the answer is:
corgi
'royal favourite' is the definition.
(I've seen this before)
'fancy that american who serves' is the wordplay.
'fancy that' becomes 'cor' (I can't justify this - if you can you should believe this answer much more).
'american who serves' becomes 'GI' (GI can informally mean a US soldier).
'cor'+'gi'='CORGI'
Can you help me to learn more?
(Other definitions for corgi that I've seen before include "Welsh breen of dog" , "Welsh breed of short-legged dog" , "The Queen's favourite?" , "Dog of Welsh breed, royal favourite" , "Royal pet" .)