Fantasising in day about a Chinese dynasty (8)
I believe the answer is:
dreaming
'fantasising' is the definition.
(I've seen this before)
'day about a chinese dynasty' is the wordplay.
'day' becomes 'd'.
'about' becomes 'rea' (I've seen this in other clues**).
'a chinese dynasty' becomes 'ming' (I've seen this before).
'd'+'rea'+'ming'='DREAMING'
'in' acts as a link.
(Other definitions for dreaming that I've seen before include "Experiencing while sleeping" , "form of idealism?" , "In reverie" , "Having fantasies in mid-range" , "Having fantasies about Niger Dam" .)