Fighting in Bill's honour (5)
I believe the answer is:
award
'honour' is the definition.
('award' can be a synonym of 'honour')
'fighting in bill's' is the wordplay.
'fighting' becomes 'war'.
'in' is an insertion indicator.
'bill' becomes 'ad' (advertisement stuck on wall).
'war' going within 'ad' is 'AWARD'.
(Other definitions for award that I've seen before include "Grant made by a court of law" , "Tony is one" , "Tony, say" , "Prize or other mark of recognition" , "Present - prize" .)